Sunday, November 8, 2009
Best Rental Houses
Buying Rental for ResaleWhen you are looking for the deal of the century, be sure to consider the best use for the property given the neighborhood and size of the home. There are many neighborhoods that are perfect rental area, others are ideal retail areas, and some better for lease/purchase options. Some are mixes of all three. When buying and fixing up a property for quick sale as rental property, it is important to analyze the best potential of that area's specific market.Additionally, when purchasing property for rental potential, it is almost always to your advantage to find a 3 bedroom as opposed to 2 bedroom home. Most customers interested in purchasing rental property will pass over the 2 bedroom, unless it is in a high demand vacation location, like a beach house. In unique and unusual areas, one may also be able to effectively market 2 bedroom rentals. Generally however, for rental resale, the best deals are the small 3 bedroom houses in the $50-$70,000 range which will rent on average $500-$700 monthly . A 3 bedroom will almost always be preferred by a renter over a two bedroom. When looking to purchase a 2 bedroom home, always look at the floor plan and consider if there is a way to convert it to a three bedroom to most advantageously market it as rental property.While it is difficult to attract buyers for rental purchase with a 2 bedroom house, it is similarly a small market interested in the high end as well. The cost/profit margin is just too small to make it as attractive to the real estate investor in most cases. Most investors able to secure loans to purchase a 2 bedroom rental home can often qualify for the 3 bedroom home too and a positive return is more likely.So know the area, know the potential, and convert to 3 bedroom when possible to most effectively market rental property.