What to Look For In a Potential Southeast Michigan Investment Property
Renters Warehouse Blog
Over the last year, the cost of homeownership has increased by 14%,which is about three times more than the national average rate of rent increase. This means that it is becoming cheaper for people to rent their homes than to buy them in most counties in the US. While such statistics are appealing to the ordinary renter, they mean much more to a potential investor in the real estate world.
An improved opinion in renting home means an increase in demand, which is where you can thrive as an investor. However, such statistics will never play in your favor if your rental property isn't inviting enough. If your goal is to make a fortune from investing in rental property in Southeast Michigan, the first step is finding a piece of property worth investing in.
Here is how to pick an investment that will attract clients:
Pick the Right Location
As long as you invest in a convenient property location, your property can easily attract tenants. Locations that have a high real estate appreciation rate also offer you the promise of an ever-increasing property value. However, picking the right location will all boil down to your ideal tenant.
Sure, aspect like safety, the presence of amenities, and employment opportunities will almost always attract a diversity of clients, but you need to understand the pain points of your ideal tenant. For instance, if you want to attract families into your property, ensure that there are nearby schools and hospitals. If your ideal tenants are college students, then looking for real estate investments close to college communities is wise. A client-based approach to investment promises a healthy occupancy rate for your property.
The Condition of the Rental
Functionality is key when making real estate investments. Tenants want a rental that offers their ideal features without compromising on quality. Research on your ideal tenant and look for property that provides just what they need. For instance, looking for rentals with an inbuilt gym might attract fitness-conscious tenants.
However, it also pays to gauge the level of repairs you will have to make to the property before it is market-ready. Doing some minor repairs shouldn't be an issue as long as they do not take too long or cut too deep into your pocket. Before settling on a piece of property, hire a reputable property inspector to help you gauge the condition of the property. You should learn about the costs of repairs and the length of time it would take to complete them.
How much will the ongoing upkeep of the property cost you? Tenants want to live in a home where their maintenance issues can be addressed within no time. While some issues will be recurring, others will only need you to work on them once in a while.
For instance, you might need to winterize the property's drainage system as winter approaches, among other maintenance needs. Do the math on the average maintenance costs and decide whether that is a number that you can comfortably handle. Remember, you might need to hire contractors to help with the maintenance needs if you will barely be around.
The Return on Investment (ROI)
The best property should promise a great return on investment. You can choose a certain amount of cash that you want to earn from the property as profit and then choose a Southeast Michigan investment property that will fill these shoes. Among the best ways for calculating the potential ROI is to use the cap rate or cash on cash method.
The right property should not only be appealing enough to you but also attract your ideal tenant. As long as tenants are happy with what you offer, the chances are that your property's occupancy rate will be quite high. If you are looking for pieces of property worth investing in, check out our unique inventory of fully leased off-market single-family rental properties for sale!
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