In the second part of last month’s blog post real estate expert Chris Clothier outlines five more factors to keep in mind when considering a rental property to help ensure you make the right decision for your investment.
Choosing a Single Family Rental Property: A Checklist for Success
Make sure you take these 5 additional factors to help you choose a passive income powerhouse:
1. Job Market
Broader, but no less important: is your property near where jobs are located? If people are coming to work, people are coming to rent. If a major company is moving in or building a factory for example, look for properties within a 30 mile radius or so. One of the few things in real estate that rarely changes is this fact: people go where the jobs are.
One of the more obvious things on this list is to avoid high crime areas. It’s not good for property values and it’s also something that will discourage potential residents. Both the police, public libraries, and online resources should have records of crime in the neighborhood, which are more reliable than asking the person you’re trying to buy a property from. You can also look for signs of vandalism and abandoned properties that could house squatters. Also see if the neighborhood has a Neighborhood Watch program and how frequently the police patrol the area.
First things first: layouts are not permanent. They can be changed through renovations. That said, such renovations can be expensive. Layout matters because some homes, particularly older ones, can have very strange floor plans that can just be downright off-putting to residents and, down the road, buyers. If the layout doesn’t make sense, it can be difficult to live with and live in, which may deter residents from staying. A harmonious living space that makes us feel comfortable and convenienced—not confused—is ideal.
Ideally, everyone wants to keep resident turnover to a minimum. At Memphis Invest, we also recognize that we’ll have multiple residents over time in a given property, and they’ll all have different needs and sizes in their families. Does your property have enough space? While you don’t need a property with six bedrooms and four bathrooms, chances are a one bedroom property isn’t going to be enough for the vast majority of residents.
A property with plenty of square footage to accommodate the largest pool of residents is ideal. Between two and three bedrooms is typical, with at least two full bathrooms.
No, your investment properties don’t have to be pristine, high-end or even particularly beautiful to be profitable. But aesthetics still play a role and curb appeal still matters in attracting and keeping residents. Ensure that your property stays neat, attractively painted, well-maintained, and clean.
If you want to take the guesswork out of acquiring properties and want to dive straight into earning passive income, turnkey real estate investment is for you!
Companies like ours either already have properties ready for acquisition, or have the experience in the markets you want to be in, so we can guide you in selecting the perfect properties for your portfolio
Chris Clothier, author of The Turnkey Revolution, manages the development and implementation of sales and marketing for Memphis Invest. He helps potential investors define their purpose for investing in real estate and educates peer companies on best practices in the emerging turnkey real estate industry. He is a contributing columnist for BiggerPockets and an experienced speaker who regularly addresses audiences of real estate investors and business professionals.