When shopping for investment properties particularly 2 and 3 family homes there some specific details to look for to increase your ROI.
In a fast moving low inventory market – you may be searching multiple towns and having to move quickly. So what are some key things that make a good rental property. The 3 top items that I like to look for are location, condition and ease of maintenance. The first 2 will impact your ability to attract good tenants and charge market rents while the last will minimize the expense of maintaining the property.
In the suburbs as well as cities – properties located on side streets and other low traffic areas are preferred by many to those on main streets and busy intersections. It is also extremely advisable to make an investment near public transportation or within walking distance of shops or business or as in the case below – a university.
Condition refers to the exterior and curb appeal as well as the interior. In a tight rental market you can leverage older ,but classic baths and kitchens as long as they are immaculate. Fresh paint on cabinets and walls with gleaming hardwood floors appeal to many renters.
This is where vinyl siding and gas heat and hot water can really reduce annual expenses. Replacement windows with vinyl clad exteriors will also cut down on repainting tasks. Granite countertops can now be priced the same as laminate and are more durable. Decks and porches in low maintenance materials are also something to look for to keep the curb appeal high and avoid yearly repainting.
From a big picture perspective – look for properties that have been well maintained and are on solid foundations. Many of these properties are well over 100 years old and you will see lots of sloping, poorly integrated additions which detract from the look of the property, restrict market rental price, and may require more structural maintenance or correction down the road.
If a property meets many of the above criteria – then the next things to look at would be amenities such as parking , outdoor space and separate utilities. In MA- with proper attention to the rules – even water meters may be separated so that your tenants pay for all of their own utility costs directly. This reduces the administrative time spent paying bills and accounting for expenses. This is by no means an exhaustive list of things to look for – but certainly a general idea of what to keep in mind for your first purchase.