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6 Attractive Rental Property Factors From The Landlord’s POV
It makes perfect sense to scout for a rental property that is appealing to tenants. But from an investment point of view, it wouldn’t make sense if a house serves the needs of the tenants yet don’t deliver the desires of the landlord.
You’d be a fool to buy a house that’s perfect for the target tenants but don’t put money in your bank account. And your story will be the conversation topic in real estate networks for years to come as a prime example of how not to do real estate.
So what factors make a rental property an attractive on from the landlord’s perspective?
1) Requires minimal costs to fix up and maintain
A nightmare scenario of real estate investors, especially flippers, is to find out that substantial works has to be done of the house before it can be deemed safe and appropriate for tenants to inhibit.
For example, major plumbing works or foundation problems can bring the apocalypse to your cash flow. So be mindful in inspecting the condition of a property whether it’s a landed home or a condominium.
2) Within easy geographical reach
Although there are many landlords who own real estate hundreds of miles away from where they operate, most (if not all) of them would prefer their holdings to be within an area that’s easily within their reach.
This makes it easier to travel about. And it sure keeps the tenants on their toes knowing that the landlord is at most an hour’s drive away.
Talking to tenants in person rather than over the phone can also do wonders for the relationship between landlord and tenant.
Even if you are to hire a property management company to run the show, being close-by enables you to conduct any impromptu visit just to take a look at your assets.
And very importantly, it would be easier to manage vendors and contractors when you are in close proximity.
3) Relaxed regulations in the area
Some cities have very strictly enforced rental control restrictions on landlords. This stops you from having a free-hand in how you’d like to run your operations.
Working within a rental ceiling can compromise the quality of service you can provide.
You can’t run a loss-making operation, can you?
If for example, you acquire an apartment with long term inherited tenants, your profits will be very much limited when you can’t raise rental to raise revenue.
You can’t evicted them for no reason. Your hands will be tied.
4) Attractive to long term renters
Investors who buy into holiday resorts or temporary vacation homes have their revenues pretty much influenced by seasonal factors.
For example, ski resorts can look desirable to have in a portfolio but you can expect to have higher vacancies during the summer.
Although houses that cater to long term tenants are ideal, they are not always easy to acquire.
In this case, if you do have to buy into areas with seasonal demand and supply, get somewhere that’s able to charge premium rates when the demand arrives.
A lot of seasonal businesses make their profits for the whole year within a single specific month… and some in even lesser time.
5) Not too remote
You might be happy to snag a cheap place in a remote area that caters to a niche market.
But being too remote can make the neighborhood a challenging place for you to hire service providers for support.
For example, maintenance teams could find it not worthwhile to travel all the way to maintain your property. Even carpenters and plumbers might think twice before taking up the job to repair something in the house.
This can mean that you will have to take a hands-on approach or pay premium fees to hire help.
6) Proven rental market
This is easier said than done.
If there is a location with a proven rental market, you can bet that there will be a lot of competition in acquiring rental property in the area.
Yet don’t make the mistake of buying a place just because of it’s affordability.
It’s much better to buy at a high price in a proven market than to buy at a cheap price in an area with little to no demand.
Always look at the macro factors of a location before scrutinizing the micro factors. The former is usually what differentiates a successful rental property to an unsuccessful one.