New real estate investors are in the right place if they’re considering a rental property! If you’re a seasoned investor looking for a market to expand your real estate investment portfolio, you’ve picked an excellent market for growth.
Whether you’re local, in the country, or building a rental property portfolio while overseas, the right property management company can help you find the right properties to start earning money in this area. Not every available home for sale is the best first investment or next addition to your portfolio.
How can investors know a good investment property when they see one? RentSimple loves helping rental property owners—new or simply new-to-the-market—choose the best properties that help grow their long-term wealth. Here’s what to consider when buying your first property!
How to Buy Your first Rental Property
Start With Market Research
Scrolling homes for sale through online listings and looking for the right price can be a good start—but it’s not the in-depth research you need to make a wise real estate investment purchase. Pictures can be deceiving, and the price isn’t the ultimate determining factor when buying a rental property to generate passive income.
Before picking a property, it’s critical to understand the market. Your new rental property must deliver what renters want and bring in enough rental income to cover expenses and put profit in your pocket. Investors also need rental properties that deliver tax benefits like deductions and appreciation.
Northern Virginia is an excellent market for real estate investing, but that’s not all you need to know! When researching the market for your new rental property:
- Evaluate the neighborhoods. Look for excellent walkability, good school ratings, access to highways or transportation, and available retail, restaurants, and recreation. Investors also need to understand crime statistics and choose properties where renters will feel safe.
- Estimate the rent per square foot. How much rent will you be able to charge while staying competitive? If the monthly rent isn’t high enough to cover expenses and make money, it won’t be profitable.
- Review comps. How does this property compare to other rentals in the area? Compare the number of rooms, square footage, bathrooms, and other details between your potential new rental and other similar properties.
- Understand renovation costs. What will it take to get the home ready for the rental market? Estimate the costs for updates, new amenities, and other improvements and make sure the expenses work with your renovation budget.
Never buy a property without running the numbers! If a home is too cheap to pass up (but requires a lot of work) or is in a terrible location, you’ll never make money by investing in a rental that can’t overcome its shortfalls. If you’re not sure how to conduct this type of market research, let a professional property management company help! We have access to everything you need when evaluating a potential investment property.
Put Personal Preference Aside
Choosing a rental property based on where you would live or what you want in a home can be an expensive investor mistake. Successful real estate investors know that personal preference can’t influence the business of choosing the best rental properties to build long-term wealth.
In most cases, what renters want in a home won’t be the same as the creature comforts you prefer in your private residence. Yes, renters want safe, comfortable, and efficient homes. However, high-end touches like granite countertops or expensive wood floors can make a rental less attractive to renters in Northern Virginia.
Rental properties must provide the amenities renters look for without outpricing the market. Your rental might be the classiest, most luxurious home on the block—but if the rental price is too high for the market, you won’t find a renter willing to pay that much for luxury.
Renters Must Come First
You won’t live in your rental property. It’s more important to prioritize the features renters want (and will pay for) over creating rental properties that you would call home.
However, that doesn’t mean you should sacrifice quality. The right property management company helps investors find affordable properties and make the right upgrades to keep rentals competitive (and occupied with quality renters). Delivering the best rental properties in the market means meeting renter needs, providing professional property management, and pricing rentals to attract (and keep) the best renters.
Find The Best Property With Help From a Property Manager!
Take the guesswork out of buying your first rental property! The best Ashburn property management team understands the market and knows what renters want. RentSimple helps investors (while local or when deployed overseas) research and purchase rental properties that make the best financial sense for their goals.
When you’re ready to explore the Ashburn rental market, let us help! We’re here to help you avoid a bad investment and make the best choices to grow your long-term real estate investment wealth.