It’s no secret that real estate investing is a great way to earn cash. That being said, however, not all investment properties are made equal. Some properties are more favorable than others to both the tenant and the owner.
To tenants, the best real estate investment properties are the ones that make the tenant feel at home, undergo few issues, and provide features that ease their living.
To investors and owners, the best properties provide high returns, quality tenants, and low vacancies. In order to turn your property into the best real estate investment property it can possibly be, you have to fulfill both the investor’s and the tenant’s needs. Here are features that will help your property to hit the jackpot.
Related: 5 Must-Have Features of an Income Property
Location, location, location
If you’re familiar with real estate, then you probably already knew this was going to be the first feature mentioned. The location of your property will be a key factor in the amount of profits you’ll potentially earn.
Having a property in a suitable location is a major attractant to tenants. Tenants want to live in properties that are nearby important venues. That’s why properties near school districts, shopping centers, restaurants, and hospitals (among others) are very captivating to tenants. Try to find properties near these places.
The proximity of the property to other places isn’t the only thing tenants care about when it comes to location. Prospective tenants care about the status of the property’s location itself. Imagine yourself as the tenant and think about what kind of questions they will have in mind about the location. Is the rental in a good neighborhood? Is the neighborhood crime-ridden? How does the job market in the location fare off? Are the neighbors loud and noisy? Is there a lot of traffic around that location? Is there adequate space to park my car? These are valid concerns that will attract or repel tenants. Be sure to search for the best real estate investment properties in locations that tenants would enjoy living in.
As for investors, the money-making locations are what count. These factors all contribute to the ROI but search an area on Mashvisor to get projections of rental income and other return metrics.
Reliable Landlord
Being a cooperative landlord is obviously not a tangible feature of a property, but that does not downplay its importance. The best real estate investment properties have the best landlords. Tenants do not want to deal with grumpy and testy landlords.
What does being a reliable landlord have to do with having the best real estate investment properties? Aside from making your life easier, being a reliable landlord typically results in lower vacancies. This is an ideal for rentals; your properties are less likely to be empty and are instead generating cash.
By being cooperative with tenants, they are less likely to leave. If you address and solve any given problems quickly and properly, and everything else about your property is in good shape, why would the tenant want to leave? It is true there are times that a tenant would have to leave due to external factors like being relocated, but generally, being a helpful landlord reduces a tenant’s likelihood to leave.
Related: 6 Landlord Laws and Concerns You Should Be Aware Of
Analytics Friendly
The best real estate investment properties are not purchased and managed as a hit-or-miss. They are carefully and accurately sought and regulated. If you want to find the properties that can potentially be the best, they should be backed by analytics that prove their worth and future ability.
Mashvisor’s investment property calculator easily and quickly searches and evaluates different properties in selected neighborhoods using predictive analysis. You will be able to know the cash flow, cash-on-cash return, cap rate, projected rental income, occupancy rates, investment strategy, and an investment valuation score. With these factors, you will know the potential of the property to be very lucrative.
Related: How to Find an Investment Property Using Analytics
The main hitter for analytics is cash flow. The best real estate investment properties have positive cash flow, producing high returns. In other words, after all expenses associated with the property (taxes, mortgage, insurance, etc.) have been paid for, a significant amount of money remains.
Related: 5 Ways to Create a Positive Cash Flow Income Property
Appearance, Ability, and Amenities
How does your property look? Does the property function properly? What kind of amenities are provided? The best real estate investment properties appear clean-cut, function efficiently, and provide helpful amenities.
To get an upper-hand with the tense competition, try to make your investment properties look more appealing compared to nearby rentals. This will also help you with more initial exposure to tenants. If your property looks better by having balconies, swimming pools, fireplaces, and great views, then tenants will be more likely interested in your property.
With that being said about appearance, remember the old saying, “don’t judge a book by its cover”. A mansion-looking rental means nothing to tenants if the roof leaks every time it rains. The best real estate investment properties are free from maintenance complications. Make sure that your properties function properly and efficiently. No one wants to live in a rental with clogged drains, pest issues, weak water, and a dysfunctional heating or cooling system.
Try to conduct periodic rental renovations. These renovations do not have to be pricey, adding simple touches like a backsplash behind the kitchen sink will definitely be a plus. You gain temporary and long-lived benefits with renovations. In the short term, you will likely encounter fewer maintenance issues, satisfying you and the tenant. Over the long-term, renovations will help the property appreciate, leading to a higher ROI if you want to sell.
Sometimes, by just having certain features and amenities, your property is better. It’s that simple. Having an open floor plan is an excellent way to deal with interior space, an immense concern for tenants. Making sure closet space is sufficient is also a top priority. Having some sort of out-door space in front or behind the rental is great as well. You can also get ahead of competition by adding a washer and a dryer, since most rentals do not usually include them. Security features, such as fences or cameras, are also features tenants want properties to have.
Transforming your rentals into the best real estate investment properties will not happen overnight. As the famous saying goes, Rome was not built in a day. But with a solid foundation backed by a proper location and informative analytics, careful planning and managing renovations and amenities, and a cooperative relationship with the tenant and landlord, your properties will be the best versions that they would possibly be.
For more guidance on the road to having the best real estate investment properties, with resourceful data and tips, visit Mashvisor.