Some properties make better rentals than others, so it’s essential to choose wisely when shopping for a new investment property to add to your portfolio. This article discusses important things to consider when investing in a rental house, condominium-unit, or duplex.
Understand That You Are Buying for the “Market”
Your likes and dislikes should not be the ultimate determiner of what to buy. If you hate breakfast bars in kitchens, but breakfast bars are the “hot item” for prospective renters in your market, then you had better put your own taste aside. Look at properties that will most likely satisfy the wants of the market: in this example, that means buying a property with a breakfast bar. Makes sense, right?
While sales brokers know sales, they seldom have any true expertise when it comes to rentals: this is where the advice of a good property manager really helps. It’s smart to get your property manager on-board early—before you make a buy—to give you their advice on the rentability of any properties you’re considering. Discussing such things as neighborhood appeal, amenities, floor-plans, and likely rental rates before you buy can keep you from making an expensive mistake.
Run-Down Isn’t Necessarily All Bad
Sometimes there’s nothing like starting with a “diamond in the rough” to create long-lasting value in a rental. As long as the property has “good bones” (structural integrity) things like paint, flooring, fixtures, counter-top, and appliances are simple, easy, and relatively inexpensive fixes that can help your rental “pop” in the eyes of prospective tenants. Your sales agent will assist in negotiating an appropriate purchase price based on condition.
This is another area where a good property manager is invaluable: they can help ensure you don’t overspend on unnecessary upgrades, or skimp on areas that will genuinely add value. Unlike sales agents, property managers are regularly involved in the repair, maintenance, and remodeling of rentals, so they have the expertise and resources to put you in touch with professionals who will get the job done right. Your property manager can help facilitate the entire process from start to finish, so get them involved early and follow their advice.
Some properties make better rentals than others, so it’s critical to choose wisely when shopping for a new investment property to add to your portfolio. Real estate investing is a team sport! Sales agents, property managers, and tradespeople all need to be a part of your team from the beginning. Choose properties that align with market conditions and don’t fixate on your own personal tastes when making a decision. Don’t overlook possible “diamonds in the rough.” Trust your team, act methodically, and your real estate investing success will be virtually assured!
Your Next Step
Real Property Management of Sarasota & Manatee, is a Sarasota, FL based residential property management company providing both Full-Service and Lease-Only services to local area landlords. If you own residential investment real estate anywhere in Manatee and/or Sarasota counties, do feel free to reach out to our team at 941-216-0005, or through our website HERE.
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.