Whether you’re considering your first or fiftieth investment property, rentals can be one of the most profitable options out there. In fact, profitable rental property can be an extremely effective way to build long-term wealth, while also allowing you to enjoy an often-consistent stream of rental income along the way.
But before you can dive into rentals and SFR real estate investing, you’ll need to be ready to answer one of the most important (and most common) questions on the topic: how do you choose the best residential properties to rent for investment purposes?
Top 7 Profitable Rental Property Features
If you’re considering investing in residential rentals, here are seven key profitable rental property features you’ll want to look for.
1. High demand
An active real estate market and a growing population are two excellent indicators of steady demand for rentals. These factors prove that not only do people want to live in a specific area, but they’re also willing to pay a premium to do so.
2. Close proximity to amenities
Ideally, tenants will be a short distance from grocery stores, restaurants, and green spaces. Rentals in master-planned communities are particularly attractive to tenants because they provide high-quality and lifestyle right in the tenants’ backyard.
3. Good schools
When families are searching for a new rental, school quality is usually at the top of the list. You can use various online tools and resources to determine the quality of the school district(s) serving potential rental properties.
4. Healthy job market
Ample job opportunities can attract a significant number of potential tenants, increasing demand for specific areas while also raising rent prices – for investors, that’s a win-win.
5. Low crime
Nobody wants to move to an area where they don’t feel safe, which is why crime statistics are an important factor in your search for a rental investment. In some cases, up-and-coming areas can prove to be very profitable – but choose wisely.
6. Professional property management
Ask yourself this: who will be responsible for taking care of your rental property? Unless you have a considerable amount of free time, you’re going to want a professional property manager handling the day-to-day tasks.
7. Low maintenance costs
Expensive repairs and constant maintenance can quickly burn through your profits, which is why older homes don’t usually make the best investment properties. Consider newer builds to minimize the future expenses associated with maintenance.
Before you commit to new income property, it is critical that you examine its pros and cons as closely as you can. If you opt to partner with a developer, their transparency is a necessity. As with any type of business partner, rental property developers should be happy to provide you with extensive details on their track records for profit margin, occupancy rates, and other factors.
Choosing a Property
Although the often-lower price of a condominium or townhome may seem appealing, investing in single-family rental homes tends to be the more viable option when it comes to profitable rental property. Here’s why:
- Single-family homes can be rented at a higher price in most markets.
- Single-family homes typically attract long-term renters, versus shorter-term occupants often drawn to apartments and condos.
- Single-family homes may offer a higher appreciation value in addition to a better-projected cash flow.
Making the Investment
Once you’re ready to make your move, there are many different ways to acquire the means for investing in rental home property. Of course, your specific circumstances (including available capital, lending options, and etc.) will play a significant part in deciding how to invest in real estate.
For example, if you own a large plot of land, you may be able to use that as an entry point to a partnership with a developer. Or, you might consider a REIT (real estate investment trust) as an alternative to a traditional loan.
The Bottom Line
With the right approach, rental homes can be an exceptional opportunity for a profitable and fairly low-risk investment. Remember that rental properties can often provide both short- and long-term payoffs: you can accumulate the monthly rental income while slowly building equity as well. But above all, choosing the right profitable rental property investment will make all the difference.
Take an Innovative Approach to Profitable Rental Property by Partnering with Wan Bridge
Wan Bridge is a Texas-based developer and property management team creating the Lone Star State’s premier build-to-rent communities – and we’re always happy to hear from individuals interested in working with us. Our professional partners included many of the most reputable names in construction, finance, law, and consulting, and we take pride in our thriving relationships with our investors.
By developing high-end rental communities with integrity and style, specifically in locations with outstanding demand, we’ve built a multimillion-dollar portfolio and a legacy of success.
If you’re ready to claim your piece of the fast-growing rental investment market, connect with our team to learn more about our current opportunities today!
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