Investing in rental properties is a big risk, but can be financially lucrative if done correctly. From a property manager’s standpoint, there are several factors you should take into consideration when buying investment properties. These are some of the key points we have found in good investment properties.
1. Number of bedrooms and bathrooms. The number of bedrooms and bathrooms is often the most important factor to consider when buying investment property. For single family homes, you will want to make sure that the home has at least 1.5 or 2 bathrooms with 3 bedrooms. We have found that 3 bed, 1 bath homes are extremely hard to rent. When dealing with multi-unit complexes, this is not as big of an issue, but still adds more value for a greater number of bathrooms.
2. Updated amenities. Typically, the number of bedrooms and bathrooms determines the price range that your property will rent for. However, the amenities in your property generally determine how fast it gets rented. If your rental property has updated amenities, it is likely to be rented first over competing properties. If your property is out of date, it may be the last one rented, costing you extra months of no rental income. Kitchen’s and bathrooms are often the most sought after updates in a home, so consider these updates first.
3. Location. In real estate, it’s “location, location, location!” That holds true with rental properties as well. Which end of town your property sits on can have a major affect on it’s rental value.
Find out about the school district your rental property would be in. Check out the amenities that are close by. Would your rental home be close to a major employer (in our area, such as Ft. Riley?) These considerations will have a major impact on how easy it will be to get your property rented.
4. Parking. Is there enough parking spots at the rental property? In Manhattan, there must be at least one parking spot per bedroom. This can become quite a problem for large, multi-unit complexes. The type of parking spaces, whether it’s on-street parking or private parking, will affect your rental potential as well.
5. Outdoor amenities. Would your rental property have a yard with a fence for pets? Allowing pets increases your total number of potential tenants you can market to, and may be the difference in someone choosing your property over a competitors. Decks and patios are a plus as well. Although they likely won’t get you more rent, they may be a deciding factor to get your property rented more quickly.
6. Get the property inspected. Before purchasing a rental property, be sure to have a licensed inspector inspect the property. We often see people buy rental properties, only to find out that there is several thousands of dollars in repairs that need to be made before the property can be rented. Save yourself the headaches up front by getting it inspected!
If you want to know more about what to look for in investment properties, call our office at 785.320.7977 and ask for Craig!