There are numerous factors that can contribute to a good investment property. You’ll want to be able to see the best return on your investment, have a dependable source of income, and maintain your rental property for a long-term investment.
A good investment property is based on the type of property you own, the condition of the property, as well as the amenities it has. Here’s what you should know when considering what makes a solid investment for your income property!
The Type of Property
If you’ll be purchasing a property with the intention of renting it out, you should ideally consider the following three types of properties for your purchase:
1. Condos
2. Single-family homes
3. Townhouses
Each of these properties will come with their own pros and cons, such as Homeowner’s Association (HOA) fees and rules for condominiums, potential property hazards for older homes, and parking restrictions, so consider these before purchasing.
The Condition of the Property
There are many factors to consider when evaluating the condition of your potential investment property. The condition of your rental property is going to be instrumental for both your short-term and long-term expenses as well as your success.
Exterior factors to consider on your potential property are:
1. Gutters and exterior drainage
2. Exterior trim, siding, and finishes
3. The style and condition of the roof
And factors to evaluate for the interior condition include:
1. Appliances
2. HVAC equipment
3. Plumbing
These factors have the potential to be the most expensive to maintain, repair, and replace when it comes to your investment, so considering these elements can help you make an informed choice before purchasing.
The Structure of Your Property (for Hidden Expenses)
The structure of your investment property can be hiding some costly repairs. Consider that if your potential property was built earlier than 1970, you may have galvanized pipes, which are more prone to corrosion and leaks over time. Your property may also have lead paint, asbestos, and other hazards that you’ll need to handle before renting out the home.
These types of issues—especially plumbing issues or HVAC issues—can cause thousands if not tens of thousands of dollars in damage. Removing these potentially costly hazards will be important for your investment, so consider the age and structural issues before you decide to commit to a particular property.
Additional Factors to Consider
You’ll also want to evaluate what the home offers when considering an investment property, including:
1. Location. Generally properties in the city will net a higher rent than those in the suburbs, although each specific location will vary.
2. Bedroom count. Two or more bedrooms are best when renting out a home.
3. Bathroom count. At least one and a half baths are ideal for most tenants.
4. Parking. Parking can be costly if there isn’t a designated space; consider the costs of parking if your tenants own a vehicle.
5. HOA rules. You should always review the HOA rules and regulations as these can affect the performance of a rental property.
An Experienced Property Manager Makes a Good Investment Property
Hiring a property manager can augment the success of your investment, and if you enlist the help of an experienced property manager when purchasing your property, even better.
In the state of Virginia as well as in Washington, DC, property managers are required to be licensed real estate brokers, so they’ll have invaluable knowledge of what investment will do well. These professionals can assist with the acquisition and disposition of investment properties.
When you’re considering an investment property in the DC Metro area, give us a call at Circle Property Management. We’re happy to help you evaluate a potential property as well as to get your property ready to rent, find the right tenants, and maintain your investment. Get your free quote today at 703-349-0144. We look forward to assisting you!
About The Author
Eric Guggenheimer - SFR, ARM ® » Principal Broker, Certified Property Manager, IREM, ARM, NARPM, NVAR, NAR, VAR
