What to Look for in a Rental Property
If you’ve ever thought about acquiring a rental property for your investment portfolio, the U.S. real estate market is ripe with possibilities. While many investors prefer to stick to their own backyard and buy rental property close to home, there are quite a few real estate markets across the country that should get you thinking about expanding horizons. This week, CNN Money published The 10 Best Cities to Buy a Rental Property, profiling ten markets offering favorable terms for investors. The article highlights many qualities that investors should consider prior to adding a property to their investment portfolio. We’ll highlight some of those today.
- Rental rates vs. mortgage rates: While you might find home prices that you consider to be reasonable in many markets, make sure to consider what local market rents are in relation to your potential mortgage payments. Reasonable in one market is necessarily in another.
- Property management fees: Standard fees range from 7% to 15% and vary considerably across the country. Even if the mortgage vs. market rent pans out, you might find yourself upside down if you don’t consider property management expenses into the equation.
- Projected home values: while many investors purchase rental homes for long-term investment, consider what projected home values will be in the next 3 to 7 years. If you find yourself needing to sell, you don’t want to be caught by surprise.
As always, a great realtor can help you research most any market you’re interested in. Ask your local realtor to make a connection with a realtor on another market and have tow professionals working for you instead of just one. After all – another set of eyes on an investment deal is never a bad thing. We hope to see you out and about around town and if you’re at a loss for things to do, our local events calendar is always at the ready with the best in the San Juans!
The Staff at San Juan Realty, Inc.
Tags: colorado investment property, real estate investment, rental rates
