fbpx
Rental Home Investments
Rental homes whether they be single-family detached properties, condos, two, three or four-unit properties share many of the same benefits. Most people instinctively understand many of the working parts because they are the same as their home. They have a basic understanding of value and how to maintain the property. The service providers for a […]
Rental Home Investments
Rental homes whether they be single-family detached properties, condos, two, three or four-unit properties share many of the same benefits. Most people instinctively understand many of the working parts because they are the same as their home. They have a basic understanding of value and how to maintain the property. The service providers for a […]

EfHleWmLf0Opb0-jCbh7lg.jpg

Rental homes whether they be single-family detached properties, condos, two, three or four-unit properties share many of the same benefits. Most people instinctively understand many of the working parts because they are the same as their home. They have a basic understanding of value and how to maintain the property. The service providers for a home would be the same for a rental home.

These properties allow an investor to obtain a large loan-to-value mortgage at fixed interest rates for up to thirty years. They appreciate in value, currently exceeding many other assets; have defined tax advantages and allow an investor more control than many alternative investments.

Most lenders require 20-25% down payment and will finance the balance at rates close to owner-occupied homes. Buyer closing costs will add another three to four percent to the amount of cash needed to close. It is also prudent to have available funds for repairs and maintenance.

There are successful real estate investors in every price range and part of town. If your ultimate goal is to have the rent handle the holding costs and to sell the appreciated property at the end of a seven to ten year holding period, it might be advantageous to stay in predominantly owner-occupied neighborhood. They usually appreciate faster and will appeal to a buyer who wants it for their home. Chances are, this type of buyer will pay a higher price than an investor who may not be willing to pay as high a price.

By staying in an average price range, or possibly, slightly lower, you’ll be able to appeal to the broadest group of not only buyers but also tenants while you are renting the property. Even during the mid-80’s when FHA interest rate was 18.5%, buyers were still purchasing homes. Whereas the higher priced homes have a tendency to slow down during trying economic times.

Ask your real estate professional what price ranges sell the best, rent the best and have mortgage money available.

Some investors manage their properties themselves and others don’t want to be involved. Professional property management has advantages like expertise, established contacts, operating statements and economies of scale. The main disadvantage is the cost factor but if they can rent it for a higher price and keep expenses lower than you can, it could minimize the difference.

A possible consideration might be to have a real estate professional place the tenant, check the credit and write the lease. There would be a one-time fee for this, but the owner/investor could then, manage the property, saving the expense of a monthly fee.

Understanding the landlord tenant laws would be particularly important to an investor managing their own property but regardless, the investor needs to have a basic familiarity of the law. There can be civil as well as criminal aspects. Examples might be that a landlord is required to change the locks on a property for a new tenant; the number of days before a landlord must return a deposit and what to do if there are damages causing all or part of it to be withheld.

Another tool that can be very helpful for investors is an investment analysis that will assist them in selecting a property that is likely to provide a satisfactory rate of return. Ask your real estate professional if they can provide this for you. They should be more familiar with rents and expenses to be able to determine the cash flow and what kind of yield you may be able to expect over your intended holding period.

For more detailed information, download our Rental Income Properties and contact me to schedule a meeting to talk about the possibilities.

LIST OF BLOGS

A Lesson from a Pro

A well-known professional home stager, recently, decided to sell the 4,000+ square foot home which she lived in with her husband. It was certainly well maintained and by most standards, could have gone on the market immediately. However, she still went through a full...

Equity, Price and the Agent You Select

A Seller's equity in their home is the difference between what the home is worth and what they owe. At any point in time, it is an estimation because value is a very subjective term. If the seller thinks the home is worth more than an actual buyer will pay for it, the...

Rising Rents – Music to Your Ears?

Rents going up may not be pleasant to hear for tenants, but it could be music to your ears if you are an investor. The recent CoreLogic Single-Family Rent Index, April 2021, showed a 5.3% increase in national rent year over year which doubled the increase experienced...

Choosing the Right Agent in a Seller’s Market

Even in the present, low stock real estate market, sellers are withstanding the desire to offer it themselves and still looking for the aid of a realty specialist. It might be more crucial than ever and there is excessive at stake to run the risk of going it alone....

5415 Easton Dr, Springfield, VA 22151

Price: $825,000 5415 Easton Dr, Springfield, VA 22151 MLS #: VAFX2014124 Tax ID #: 0801 02210031 Ownership Interest: Fee Simple Structure Type: Detached Levels/Stories: 3 Waterfront: No Garage: No Beds: 6 Baths: 4 / 1 Above Grade Fin SQFT: 3,035 / Assessor Price / Sq...

46490 Cedarhurst Dr, Sterling, VA 20165

Price: $750,000 46490 Cedarhurst Dr, Sterling, VA 20165 MLS #: VALO2005950 Tax ID #: 018396668000 Ownership Interest: Fee Simple Association: HOA Structure Type: Detached Levels/Stories: 2 Furnished: No Waterfront: No Garage: Yes Beds: 4 Baths: 3 / 1 Above Grade Fin...

10025 Bonnykelly Ct, Bristow, VA 20136

Price: $654,990 10025 Bonnykelly Ct, Bristow, VA 20136 MLS #: VAPW2000470 Tax ID #: 7495-33-3072 Ownership Interest: Fee Simple Association: HOA Structure Type: Detached Levels/Stories: 3 Waterfront: No Views: Garden/Lawn, Street Garage: Yes Beds: 4 Baths: 2 / 1 Above...

9774 Upper Mill Loop, Bristow, VA 20136

Price: $629,999 9774 Upper Mill Loop, Bristow, VA 20136 MLS #: VAPW2006976 Tax ID #: 7595-24-7295 Ownership Interest: Fee Simple Association: HOA Structure Type: Detached Levels/Stories: 3 Waterfront: No Garage: Yes Beds: 5 Baths: 2 / 2 Above Grade Fin SQFT: 2,912 /...

15032 Woodglen Ct, Dumfries, VA 22025

Price: $595,000 15032 Woodglen Ct, Dumfries, VA 22025 MLS #: VAPW2005556 Tax ID #: 8191-02-2763 Ownership Interest: Fee Simple Association: HOA Structure Type: Detached Levels/Stories: 3 Furnished: No Waterfront: No Garage: Yes Beds: 5 Baths: 3 / 1 Above Grade Fin...

RECENT POSTS

A Lesson from a Pro

A well-known professional home stager, recently, decided to sell the 4,000+ square foot home which...

ABOUT  TWENTY
THREE HOMES

The Twenty Three Homes are one of the premiere real estate groups locally, nationally and internationally, specifically dealing with high-end properties and exclusive clientele. Partner with Keller Williams Twenty Three Homes are full service real estate experts whose clients benefit from the custom tailored, hands on service while receiving all the exclusive amenities and resources of one of the most established and respected firms in the business.

GET IN TOUCH