Whether you’re looking for your first real estate investment or your tenth, finding the right property is critical to making a profit. Two identical houses in different locations can have different values and different potential for profit. Likewise, two neighboring properties can also be very different in terms of a financial investment. It takes a lot of work and research, therefore, to identify the best real estate property investments.
There are several physical factors identifying good residential real estate investment. So, here’s a list of 5 important features to look for when determining whether an investment property could generate long-term profits.
#1 Neighborhood and Curb Appeal
Three things affect a prospective tenant’s initial impression of a rental property: neighborhood, curb appeal, and general appearance.
Just like homebuyers, prospective tenants choose a home for their family both from a logical and an emotional perspective. They pick a home that “feels” right, and also serves their needs. They want a home that is a safe place, and that they’re proud to call home. So their first impression of the neighborhood and outside of the home is very important.
#2 Entryway and High Ceilings
When entering a rental home, a prospective tenant’s initial reaction is also very important.
The entryway is the first thing that’s experienced when entering a home, and sets the tone for the whole property. An inviting entryway that makes a prospective tenant feel safe in an inviting home sets a positive tone, but an entry way that is outdated and lacking doorway security sets a negative tone.
Ceiling height in the entryway, and throughout the entire property, also adds or detracts from a prospective tenant’s first impression. A lower ceiling height makes the home feel dated and undesirable, but a nine-foot-high ceiling makes the home feel fresh and up-to-date.
#3 Modern Floor Plan
Renters are becoming more and more selective regarding floor plans, and though a traditional and old-fashioned design will attract some tenants, a modern floor plan is the best way to ensure great profitability for real estate property.
One of the biggest factors of a profitable rental property is an open floor plan with a large modern kitchen. Small kitchens that are closed off from the rest of the home are less popular. Other important features of a modern floor plan include a master bedroom with its own spacious bathroom, walk-in closets, and walk-in pantries.
#4 Front Yard and Backyard
Outdoor entertainment areas are an important part of many homes. Large green spaces can dramatically affect the appearance and feel of a property, and make it more desirable to renters. Many renters are looking for a single-family home instead of an apartment, based solely on their desire for private green space for children and pets.
Depending on the location and local tastes, there are a lot of improvements that can be made to the front and back yards, including: landscaping, pool, outdoor bar, fire pit, and other amenities.
Profitable single-family homes have ample parking for residents.
At minimum, renters want parking for two vehicles. If more parking is available, however, the property could demand a higher rent. In addition to outdoor green space, a family may be relocating to a new home in order to have access to more parking for teenage children.
Finding Profitable Rental Properties
There are many characteristics of profitable rental properties. Therefore, investors often rely on a local real estate expert to locate high cash flow rental properties that can be profitable for years.
At Graystone, we help new and seasoned investors find, rehab and manage investment properties in the greater Tampa Bay area. Through this process, we find properties that we resell to investors at discount prices, while also connecting them with private financing and coordinating with rehab and management companies we’ve worked with for years.