Best Place to Buy Rental Property
Hello Hampton Roads,
Check out this table on residential rental returns by market:
http://public.tableau.com/views/Q12015ResidentialPropertyRentalRankings/Dashboard1?:embed=y&:loadOrderID=0&:display_count=yes
Regardless of whether you buy-and-hold in your own backyard or someplace else, remember to always do your research and know the market you intend to enter. Once you have determined the right area, do the necessary due diligence on the property you intend to buy. If you do these steps correctly you will have determined the best place to buy rental property for you, and these two steps will help you have a happy and profitable rental property ownership experience.
Thanks for Reading,
_________________________
Serving your Hampton Roads and Virginia Beach Real Estate needs. Liz Schuyler on Google+
Where is the best place to buy rental property?
There are
many factors to think about when determining the best place to buy rental
property.
There are some prior questions to consider also, such as,
why do you want to buy rental property? Will it serve the purpose you have in
mind? Do you have the resources (time, financing, knowledge, property
management skill, etc.) to purchase rental property? If you are solid in your
decision-making and want to proceed, here are some things to consider about the
“where” of rental property.
First, are you planning to manage and maintain the property
yourself or hire a property manager? If you plan to manage and maintain, the
best place for you may be in an area near your home, provided that the rental
market is ok. There may be better rental markets out there, but if the financials
work for your area, it may be the best bet.
If you plan to hire a property manager, you can potentially
buy property anywhere. This of course requires that you have a trustworthy team
to help you buy, manage, and maintain the property.
Second, how strong is the rental market? This is key in
determining the best place to buy rental property! There are a few variables to
keep in mind. What is the gross domestic product (GDP) of the state or area of
the target property? Some people look at economic data for the Metropolitan
Statistical Area (MSA). If the GDP is rising and steady over time, then the
economy is generally healthy and suitable for buy-and-hold investing. If it is
dropping or stagnant, perhaps it is not a good idea to invest.
If you are looking at property within an MSA, check to see
that the MSA is not dependent on one or just a few industries—the more
diversified, the better, and the less susceptible to any one industry’s
business cycle. Also look at the job and unemployment numbers—lower
unemployment and strong job numbers are better for a rental market.
If the numbers are available find the percentage of renters
in the market—preferably it will be in the 35% range—because you want to have a
higher than average number of renters in your market. Also see if you can find
the Housing Affordability Index. If not, you can calculate it—it is the median
home price divided by the median family income. In general, a number 3 or lower
is considered ok, and the closer to one, the better.
Hampton Roads has traditionally been a good rental market, although some would say it is too dependent on a few industries--military and shipbuilding. Nevertheless, the are is still recognized as a worthy buy-and-hold market. For example, based on gross rental yields, our own Newport News is among the top five markets in the country for renting to millennials.
Hampton Roads has traditionally been a good rental market, although some would say it is too dependent on a few industries--military and shipbuilding. Nevertheless, the are is still recognized as a worthy buy-and-hold market. For example, based on gross rental yields, our own Newport News is among the top five markets in the country for renting to millennials.
Check out this table on residential rental returns by market:
http://public.tableau.com/views/Q12015ResidentialPropertyRentalRankings/Dashboard1?:embed=y&:loadOrderID=0&:display_count=yes
Regardless of whether you buy-and-hold in your own backyard or someplace else, remember to always do your research and know the market you intend to enter. Once you have determined the right area, do the necessary due diligence on the property you intend to buy. If you do these steps correctly you will have determined the best place to buy rental property for you, and these two steps will help you have a happy and profitable rental property ownership experience.
Thanks for Reading,


_________________________
Serving your Hampton Roads and Virginia Beach Real Estate needs. Liz Schuyler on Google+
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