If you are thinking about investing in rental property, it is important to buy the right type of property to give yourself the best chance to earn a high return on your investment. Most experts agree that the best investment property for beginning rental property owners is a residential, single-family dwelling or a condominium. In addition to the type of property, the potential for a rental property to appreciate in value is important as well.
Condos are generally low maintenance because they usually have a condo association to help with external repairs as necessary. Therefore, you, as the owner, need only worry about the interior. However, since they are not really independent living units, they tend to garner lower rents than single-family dwellings, and also appreciate in value more slowly as well.
Single-family homes have a tendency to attract long-term renters, usually families or couples. Families, or two adults in a relationship, tend to be better tenants than one person alone because they are more likely to be financially stable, making them better able to pay the rent regularly and on time. After all, two people can live almost as inexpensively as one person, but typically have two incomes. Families also often have children in school, which makes them less likely to move suddenly. Of course, you want to look for properties that will attract this type of demographic when you are looking for rental property to purchase. Keep in mind that tenants with children will often pay more for a property in a good school district as well.
Another aspect to keep in mind when it comes to earning a healthy return on your investment is purchasing a property that will most likely appreciate in value over time. To that end, don’t discount properties that are priced somewhat out of your budget. Often real estate sells below the listing price, especially if the market is slow. When it comes to judging appreciation potential, look for properties with solid construction that could benefit from simple actions like cosmetic changes or easy renovations. These sorts of changes can allow you to attract better tenants and also to charge more in rent.
Once you have chosen the right rental property for your needs, the experienced team at Fort Lowell Realty and Property Management can work with you to protect your investment by managing your rental property for you. We aggressively market your property and use a rigorous screening process to select high-quality tenants. We also oversee maintenance needs and the collection of rent, making owning a rental property easier than you ever imagined.
Want to Learn more about investment properties and the advantages to buying a duplex, triplex, fourplex? Watch the following video: