Today’s blog topic is: what type of property should I invest in? I am frequently asked this question by investors in the Sarasota, Bradenton and Lakewood Ranch area. The objective is to purchase a property that can be leased quickly for a consistent amount and stay rented for a long time. It’s also important to consider the upward pressure on market valuation over time.
Think about single family homes versus condos. Although there is a market for both, I have found the most consistent demand over time is for a single family home. Condos have to compete with apartment complexes for renters, and single family homes are unique. You also have to consider the number of bedrooms in the home you buy. Three bedrooms and two bath homes are the most popular. However, two bedroom and four bedroom homes often have consistent demand. You should always look for a minimum of two bathrooms.
Price range is a huge consideration. Right now, the most demand is in the $1,200 to $2,500 rent range per month. You can certainly rent a property outside of this price range, but that’s the spread you are looking for when it comes to renting a property quickly and to the most desirable tenant.
Location is also important. Choosing a property in a desirable school district will help you with long term renters and upward valuation. Stay away from busy streets because people probably will not want to rent that house at any price.
What about a pool? Pools are fine, but keep in mind that a pool adds about $200 per month to the rent. However, it has to be maintained, so you’ll want to think about including the price of pool maintenance in the rent you are asking for.
Put down enough money on the purchase to enable enough cash flow. You want to be able to save a little of your rental income every month for maintenance costs. You also have to plan for vacancies and big ticket items over time.
Always talk to a professional property manager before you purchase an investment home that you plan on renting out. At Sarasota Management and Leasing, we provide a free service to investors where we will evaluate a home you are considering and let you know how much rent you can expect to receive on the market.
If you have any questions, or you’d like more information on how to choose the right investment property, please contact us at Sarasota Management and Leasing.