When you invest in a single family home, you want to buy one that will make the best rental property.
I have been investing in residential properties since the mid-1980s, and I have learned that not every single family home makes a good investment. Today, I’m sharing three tips.
Good Bones: Modern Systems Means Less Maintenance
Look for properties with good bones. That means the house has modern systems, including updated plumbing, electric, HVAC, insulation, and windows. If the property doesn’t have modern systems, repairs are going to be very expensive, and will eat your profits.
Choose a Desirable Location
Location is important, and we have all heard the real estate saying – location, location, location. You want a rental property in a safe neighborhood that’s good for families. Choose a single family home that’s close to shopping and good transportation. Homes in desirable areas will get more attention and rent faster.
Multiple Bedrooms Attract Long Term Tenants
The best rental properties have several bedrooms. A one bedroom property is typically rented by one person. Two bedroom homes are often rented by roommates. Properties with three or more bedrooms are typically rented by families. Families make more stable tenants and stay longer than single people or roommates. One of the keys to being a successful real estate investor is to place good, long term tenants.
For me, the test is whether I can imagine my own family living in the property.
Over the last few years, these types of single family homes have proven to make the best investments. They are easier to rent, they attract stable tenants who stay for multiple lease terms, and they require fewer repairs.