1. It makes money for you immediately
One mistake many investors make is to gauge an investment property based on the return they would eventually see once they've put a lot into renovations. This is not the ideal approach for an investor who wants to make money. As the saying goes, you should “make your profit when you buy”, which means your income (rent payments) should cover your costs upfront.
A popular rule of thumb is the “2% rule,” which is the monthly rent should account for at least 2% of the total purchase price of a property. As part of our services, we look at comparable rental listings to get a sense of what we could reasonably charge for rent and we make a recommendation. Our property management team is top notch and works to ensure you get the best service. Every year we revisit the rent amount and make changes as needed.
2. Dwindling DOM
Days on the market (DOM) is how long a property has been for sale. A key indicator for a housing market that is heating up is if the DOM is dropping rapidly across the board in a neighborhood. This typically precedes price hikes, which means you can still find a good deal on a property where you can make a profit on rent.
3. Gourmet groceries nearby
Companies like Whole Foods, Starbucks, Trader Joe's, and other high-end chains have scouts who research up-and-coming neighborhoods to find areas with residents who have disposable income to support those stores. The presence of store like Starbucks and Trader Joe's increase the real estate desirability.
4. A squeaky-clean tenant
With our services, tenants are something you will not have to personally worry about. We handle the application process including a background check, rental history check, credit check, and pay stubs to ensure their income can cover the cost of living there. We uphold high standards for our applicants to ensure we are finding the best tenants for our clients. We handle the entire process and you only have to worry about the final approval of the tenant once they've completed the application process.
Shawn & Kyle Cunningham
Cunningham Group at RE/MAX Advantage
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