Your investment goals are unique, and they will drive whether a property is a good fit for you. A lot of new investors are eager to get started in their real estate investing career, and they begin chasing any potential opportunity that comes along. However, a smart investor will be intentional and wait for the right rental home.
Those investment goals we talked about will dictate what works for you and your portfolio. There are some general considerations, however, that can always be made when you’re searching for your next acquisition. Here’s how to spot a profitable San Antonio investment property.
Is The Property Well-Located?
San Antonio and the surrounding communities are full of desirable neighborhoods. The first rule of real estate is location, and that certainly applies when you’re trying to find a profitable investment. Look for locations that will be attractive to tenants. The best renters aren’t likely to choose a home in a busy industrial or commercial district where traffic is a nightmare and there’s constant noise. They’re more likely to gravitate towards residential areas that are in good school districts, close to restaurants, grocery stores, and other retailers, and within striking distance of entertainment and recreation.
Homes that are more remote may come with a lot of privacy and space, which can be attractive, but not to everyone. You can still find a profitable rental property, but you may find yourself facing longer vacancies.
Is the Property in Good Condition?
Beware of those fixer-uppers that are so tempting because of their lower price tags. They do seem like a deal. And, if fixing up and flipping homes is part of your investment strategy, they might work for you.
But, if you’re on a buy-and-hold path that’s focused on long-term residential tenants, you’re going to want a home that needs cosmetic repairs at most. Properties that are going to require a lot of renovation and rehab work will take longer to rent out. That will hurt your ROI right out of the gate.
It’s recommended to have any potential investment property inspected before you close the deal. You want to be sure you won’t be over-spending on repairs and maintenance before you even collect a rent check. Good tenants are looking for well-maintained homes that are modern, attractive, and move-in ready. That’s how you spot a profitable rental home.
Do the Numbers Add Up?
A profitable rental home will earn you as much rent as the market supports. It won’t lose you money on long vacancies and frequent turnovers. If you come across a building that’s been plagued with vacancies or a neighborhood flooded with empty homes for rent, you may have a hard time finding tenants. Look elsewhere.
Figure out how much you need to earn in rent in order for the investment to be profitable. Get an idea of what the area’s average rental range is, and make sure you can afford that. Don’t forget to factor in your estimated costs, including mortgage, taxes, and insurance, as well as maintenance, vacancy, and San Antonio property management fees. You’ll know financially if that investment makes sense.
We can help you decide whether a specific San Antonio rental property makes sense. If you’d like some help, please contact your San Antonio property management team at OmniKey Realty. We work with rental property owners in Dallas, Houston, and surrounding areas in Dallas County, Collin County, and Houston County.