New investment opportunities are arising across the country
The following article is provided by Nate Zielinski (pictured), of RCN Capital.
Opportunities for investors to break into real estate investment property industry are popping up across the country. In an article by the Washington Post, 15% of all the homes in the top 40 metro areas in the country were purchased by real estate investors. Cities that experienced the biggest rise included Miami, Charlotte, Phoenix, and Atlanta. For as long the real estate business has been around, it is usually followed by the famous phrase, “Location, location, location.”
While location is a big factor, property features can go hand-in-hand with the location itself when it comes to a successful real estate investment property. Investors can be enticed to purchase a property based on what they can do with it or what it can offer a potential tenant. In this article, we’re going to focus on identifying those features and how investors should be taking advantage of them and parlaying the features into a profitable real estate investment property. Here are some of the property features investors should be on the lookout for when determining their next investment.
Private and local amenities
This first feature can transform a good investment into a great one. Having amenities on and surrounding the real estate investment property can be a substantial factor when it comes to closing the deal or attracting a tenant. As an investor, ask yourself, “Is this somewhere I would want to live?” If your answer is ‘no’, then maybe this property isn’t worth your time or your money. From a new in-ground pool in the backyard to a buzzing shopping center downtown, these amenities can come in many different forms. It is also crucial that, as an investor, you are knowledgeable about the amenities your property can offer for a few different reasons
Bringing a potential tenant into the home and speaking eloquently about the amenities is a big selling point. How much money newer, energy efficient amenities can save in utility bills or why certain appliances are top of the line can be useful information to a prospective tenant. From there, you can mention, shopping malls, grocery stores, fitness centers and nearby restaurants that will entice the tenant. Even though some of these are not directly on the property, the surrounding area can be important for the tenant to be aware of.
Some of the cities I mentioned in the beginning of the article are part of a larger group of cities that are experiencing a boom in the real estate investment space because most of these amenities are included with every property. Newer properties and eager tenants in a growing city are the perfect recipe for charging higher rents that reflect the value of these desirable markets.
Local neighborhood statistics
Amenities are more enticing for your tenant, but, as an investor, researching and understanding the market you are looking to purchase a property in is just as vital. Statistics such as annual income per household, crime rate, occupancy/vacancy rate and annual foreclosure stats are all aspects investors should be aware of when they are considering buying a property in a certain market.
These will be indicators for their investor. It will determine whether they should be pursuing properties in the area or can give an investor a range of what they would be able to charge for rent. Areas that have seen a high foreclosure rate might mean that the potential tenants will not be a suitable match for you and your property. High crime rates could also lead to potential property damage that will hinder the value of your investment long-term.
Finding that sweet spot in which an investor secures a property in a growing market, coupled with an appealing neighborhood and amenities is a win-win. This way, you are getting a more suitable tenant and can charge the right rent for you that will make this property cash flow and be a surefire investment. Competitive rent relative to the market is key, but you can gauge what your property may have to offer in relation to other properties in the market and go from there. The more research the better is the case in this scenario. The cash flow is the key to having successful real estate properties as an investor, so squeezing the most potential out of your property without overcharging and losing out on tenants is a delicate but important balance.
Transportation and sanitation
Transportation and sanitation are other local factors that can really contribute to the desirability of a property. Having a checklist as an investor is an easy way to vet the property and ensure it meets a certain standard. Is the neighborhood clean? Do they provide local sanitation workers that make weekly visits to pick up trash and recycling? Is the property closely located to local bus stops or train stations? Are rideshare services such as Uber and Lyft readily available in the area?
These are just a few of the boxes you’ll want to check off as an investor before deciding to purchase a real estate investment property. Tenants will either have these questions ready for you when viewing the property, or you can fill them in on all the property has to offer to put their mind at ease. Potential tenants want to have pride in where they live, so being an investor with the same mindset is helpful. Having this information on hand is a great way for an investor to make a natural transition into a landlord for long term rentals. If you do this for different tenants in multiple markets, you can become a positive part of the property and convince a tenant to choose your property.
These features make for successful long-term real estate investment properties that all investors should be on the lookout for. Locating properties that check all the boxes is worth the effort to provide investors with the chance to succeed. Managing and owning properties that are less than ideal for a variety of reasons can be a grind for real estate investors and force them to leave the industry. You want to enjoy this experience and capitalize on all the opportunities that are out there.
As an investor, if you have any questions regarding this article or other features you should seek in an investment property reach out to us at RCN Capital. Every property out there is a new opportunity for us as well, and we’ll never hesitate to discuss your next potential investment.