Which rental property is right for you? Today I’ll walk you through a few questions to ask yourself in order to find out.
How can you identify a rental property that’s right for you? In my experience with real estate investors who ask this, I often think of a few questions to ask them myself. The first one I think of is, “Are you handy?” If the answer is yes, and you own a general contracting company or you’ve done a lot of handy work before, buying a fixer-upper could be a really good investment for you. However, I don’t see a fixer-upper making someone a lot of money if they don’t know how to do the tasks necessary to make it saleable and if they’re not bringing their own work to the property itself.
If you have a property that would be intense to manage, like a multi-family home or a home where there’s a lot of turnover, you’ll really need to be ready to manage that property.
If you’re not handy and you don’t have the time to oversee the work, then I highly recommend that you move away from older properties and instead invest in a newer one. That will save you a lot of time and, in the end, if you’re not doing the repairs yourself, it’s not going to matter much. The second question to ask yourself as an investor is, “Are you a good manager?” Will you be managing the property yourself, or will you hire a property management company? If you have a property that would be intense to manage, like a multi-family home or a home where there’s a lot of turnover, you’ll really need to be ready to manage that property. On the flip side, if you recognize that you’re not ready to deal with so many moving parts and complications, then you might look into a residential home as an investment property. If the home is in a nicer part of town, you’ll likely have lower turnover and fewer issues to deal with. The last question to ask yourself in the pursuit of an investment property is, “What area do you live in?” San Antonio is a great area to buy properties, especially for property management; we’ve seen great appreciation and we have great tenants who last a long time. Regardless of where you are, you will want to buy a home in a neighborhood you know. If you think an area is good but aren’t sure, then ask the locals. Real estate is often local, so buying in an area you know and trust will allow you to invest in healthy markets and avoid problems later on. If you have any more questions about investing in real estate, you’re invited to reach out to me any time. I’d love to give you more detailed advice about picking out the right property for your needs.