New investors often find themselves overwhelmed with the sheer volume and variety of potential investment properties on the market. If you're ready to buy your first rental property, it's worth considering what type of property will work best for you, and what factors make the difference between a great investment and a questionable one.
As one of the experts in rental management San Antonio, our team has a lot of experience when it comes to not only managing rentals, but identifying which properties make the best investments. You asked, and the experts have answered: here are your top helpful tips for picking a starter rental in San Antonio!
Types of Rental Properties
Real estate is a game of supply and demand: when you're ready to invest in San Antonio rental property, preparation is key. Investing in rental properties requires looking closely at what types of properties are in high demand in your area, can attract tenants, and are within your price range. The most common types of rental properties are:
- Single-family homes
- Two-unit (duplex) homes
- Multi-family homes
- Vacation rentals.
Out of all the above, single-family homes and two-unit properties are the most common for first-time investors, both because of their affordability and their abundance in most markets. However, don't get too hung up on the specific type of home you want to buy; look more closely at the key characteristics that make a property a great investment.
What Makes a Rental Property Great?
Investors are excited about the real estate market in San Antonio right now, and there are a lot of signs that the coming year will be a great time to invest in rental properties in our fine city. The rental management San Antonio experts agree that there are great opportunities in the area—but it's also important to look closely at each property. Consider whether or not it has the key characteristics that make it a good investment:
- Location: There may be no single factor that has a greater impact on the quality of your investment than the location. Where your property is located affects its value, and just as importantly, impacts how eager your potential tenant base will be to rent it. Look for properties that have the location characteristics that renters want, like a safe neighborhood, quality schools, an easy commute, and proximity to amenities like parks, grocery stores, and restaurants.
- Age: The age and condition of a property are two factors that are usually closely tied together. In most cases, the older a property is, the more repairs will be needed to get it ready to rent, and the greater your investment will have to be. It's expected that you will have to make some upgrades, but watch out for big projects that can end up being money pits. Flaws in the roof and foundation are especially big red flags to watch out for, along with the plumbing, heating, and electrical systems.
- Amenities: Make sure your rental property has the amenities that potential tenants look for, or can be updated within your budget to appeal to renters. Look at the number of bedrooms in each unit (apartments with two or more bedrooms tend to attract more stable, long-term tenants) as well as the kitchens and bathrooms to make sure they are up to date. Factors like the availability of parking, garage space, lawn size, energy efficiency, and utilities costs also come into play.
- The bottom line: Math doesn't lie, so when in doubt, run the numbers. Calculate the costs of an investment property, including taxes, interest, and all necessary repairs and renovations, and compare it to how much you can charge for rent to see if the numbers add up. The 1% rule is usually a good principle to fall back on, stating that a property should rent each month for at least 1% of its total cost to be profitable.
Managing Your Rental Property
Another very important factor to consider is how you will manage your rental property. Keep in mind that you're investing your time as well as money, and that keeping up with all the tasks that come with being a landlord requires a lot of both. This is true when you're just starting with your first rental property, and it becomes even more apparent when your portfolio grows, and you find yourself in charge of multiple properties.
When you're ready to hire someone to manage your properties for you, it's good to know that you have one of the best in rental management San Antonio as your neighbor! A great property manager offers all the services you need to keep your properties operating at peak efficiency and keep your profits rolling in. These include:
- Marketing and advertising your property to keep all the units filled
- Thorough tenant screening and selection
- Full-service leasing management
- Timely rent collection
- Reliable, cost-effective maintenance
- Thorough inspections
- Eviction protection
- Comprehensive accounting
Ready to learn more about investing in San Antonio rental properties, and what expert rental management San Antonio can do for you? Reach out to Real Property Management Campanas today to get all the information you need on building a profitable rental property business in one of the best cities for growth in Texas!