Which are the Most Profitable Buy to Rent Properties?
The most profitable buy to rent properties to add to your portfolio are a lot harder to find than investors tell you. An issue is that investors often just look at rental prices, but there is a lot more that goes into the profitability of a rental than just the outward rental prices.
Before we talk about specific properties that rent for a lot, lets take a look at the top characteristics that renters will look for in a property:
Property Factors That Lead to Higher Profits1. Property Taxes: The property tax rates in the south are favorable, while theyre astronomical in the Northeast. Every town will have an assessment office that will help you learn more about property taxes in the area. If property tax rates are high, youll end up with less money in your pocket if rent prices dont compensate for the higher rate.
2. Crime: Properties in areas where crime rates are high may be cheaper, but theyre less desirable. The goal is to find long-term tenants, and crime-riddled areas have a tendency to have a much harder time keeping tenants for the long-term.
3. Schools: The better the schools in the area, the more long-term tenants youll find. People want to send their kids to good schools, and this will factor into rent prices. Reputable universities and colleges in the area will also be a benefit if you want to rent out the property to students.
4. Job Market: One of the most overlooked factors that go into rental prices is the local job market. Job markets will dictate a higher rent price. If the local area is teeming with jobs and opportunity, people will relocate and wont mind paying more for a rental.
5. Rent Prices: Of course, the rental prices in the area matter, too. If the rental prices are very low, youll make less after considering all of the costs involved in owning a rental. A few of the costs to consider are:
a. Property tax
b. Mortgage rates
c. Mortgage insurance
d. Homeowners insurance
e. Maintenance and upkeep
Always look into the above factors before buying a property to rent it out. If you know the factors listed above, youll be better able to understand how profitable your rental property can be. Remember, there is always a lot more that goers into the profit of a rental than just the going rental rates.
The Most Profitable Buy to Rent Properties
If you own a commercial property, youll obviously be able to secure high-paying tenants, which is a nice bonus. But if you want to find the best rental properties, this can be tricky. There is a lot that goes into the equation, but the following tips can help you find a property that is perfect for your portfolio.
Multi-Family PropertiesMulti-family properties are very profitable, and youll be able to make a lot of money on them in the right area. A duplex is a good example of a multi-family property, and you can double your rental income as a result.
Whats nice about a duplex is that you can live in one portion of the home, while a tenant lives in the other side of the building.
You also have the option of renting out both units. This allows you to pay one mortgage, insurance premium and so on. There are also triplexes (3 units) and fourplexes (4 units) available.
And these properties are great because:
Youll own multiple units that can be rented.
You will have income from tenants even if some of the units are not occupied.
If you have the budget for a multi-family property, youll be able to bolster your real estate portfolio with one purchase.
And if youre buying a property that already has tenants and leases in place, you can use these leases to show that you have enough income to purchase the property. This will allow you to get a higher mortgage.
Rentals in Tourist Areas
People forget that tourist areas are hotspots for rentals. People often like to rent out a home when theyre on vacation or visiting family, and in tourist areas, this can lead to a huge profit. A quick look at beach homes in New Jersey shows that many rentals are renting for $400 - $600 per night in the summer. This comes out to $12,000 - $18,000 a month for the 3 summer months, or $36,000 - $54,000 just for the summer season alone.
And when breaking this down, youre not even accounting for offseason rental rates, which are much lower, but still provide ample income.
MarketWatch did a study on rental properties, and the profits that they can achieve given the cost of the rental. The site found that the most profitable areas are:
San Jose, California: $8,927 profit per month
San Francisco, California: $6,078 profit per month
But these markets have exceptional rental prices that are only common in the area because many people work in Silicon Valley.
Short-term profits from Zillow also show how much money can be made per month on a home based on a six-year outlook. The cities that provided the most profit are:
Oklahoma City: $536 per month
Miami: $515 per month
Denver: $355 per month
Appreciation in home prices is also something to consider. A rental alone will not make you rich. And if you want to hit six figure income levels off of just rentals, youll need to own numerous rentals (10+) to be able to achieve your goals. But even a 10-rental portfolio may provide just $2,000 - $4,000 per month in profit in most cases. The appreciation of the homes value over the lifespan of the mortgage should be considered, too.
If home prices in the city are rising 10% per year, the home will be worth double in 8 10 years, which means you can sell for a major profit. Of course, appreciation rates are often much lower than 10%, but the goal should be a diverse portfolio with properties to rent and sell in the long-term.
LandCentury.com specializes in selling wholesale real estate at the lowest prices. We believe that everyone should have the right and the opportunity to get a great deal on investment property All you have to do to get the property you’ve always wanted is follow these simple steps:
Step 1: Find the Perfect Property
Use LandCentury.com’s powerful network of real estate listings to find the property of your dreams. We have everything from move-in ready investment properties and cheap houses to rural land, buildable lots, and fixer-uppers. No matter what type of real estate you’re looking for, you can find it at LandCentury.com
Step 2: Click the Buy Button
This will start the purchase process. As one of America’s top online property listing sites, we leverage our unique business model of submitting an online payment to hold the listing to make transactions straightforward and secure. Our purchase process is designed for simplicity and security. Once you click the buy button, you will:
Use our secure site to submit your processing fee. We make every effort to protect your privacy. That’s one of the reasons why we offer a 24-hour money back guarantee on your processing fee, so you can feel confident in your transaction.
The seller will contact you within the next 24 hours procced to the next step and get the necessary info to prepare the contract.
Buyer Transaction & Privacy Protection
LandCentury.com stands behind our buyers, and we want you to know that your hard earned money is safe when doing business through us. That’s why we have a number of features to help protect buyers, including:
Symantec Secure Site SSL certificate, providing a $1,500,000 warranty on every transaction
Secure encryption and data protection
24 hour money back guarantee on processing fees
2 separate legal offices across the country to help you with any problems you encounter, anytime
Seller ratings so you can see what other people have to say about their experience with your seller
Still Have Questions?
We’d love to answer them. Check out our Help Center page or call us at 1-888-LAND-WEB (526-3932)
Our highly specialized support team is ready to find a solution to your problem. A people first policy insures that a team member will always be available to speak with you personally.
Symantec SSL Certificate
Symantec is a global leader in providing security, information management solutions to help our customers – from consumers and small businesses to the largest global organizations – secure and manage their information against more risks at more points, more completely and efficiently than any other company. Our company’s unique focus is to eliminate risks to information, technology and processes independent of the device, platform, interaction or location.
This website can secure your private information using a SSL Certificate. Information exchanged with any address beginning with https is encrypted using SSL before transmission. LandCentury.Com LLC has been verified as the owner or operator of the website located at www.LandCentury.com. Official records confirm LandCentury.Com LLC as a valid business.
Better Business Bureau
For more than 100 years, Better Business Bureau has been helping people find businesses, brands and charities they can trust. In 2015, people turned to BBB more than 172 million times for BBB Business Reviews on more than 5.3 million businesses and Charity Reports on 11,000 charities, all available for free at www.bbb.org. The Council of Better Business Bureaus is the umbrella organization for the local, independent BBBs in the United States, Canada and Mexico, as well as home to its national and international programs on dispute resolution, advertising review, and industry self-regulation.
BBB has determined that LandCentury.Com, LLC meets BBB accreditation standards, which include a commitment to make a good faith effort to resolve any consumer complaints. BBB Accredited Businesses pay a fee for accreditation review/monitoring and for support of BBB services to the public. BBB accreditation does not mean that the business’ products or services have been evaluated or endorsed by BBB, or that BBB has made a determination as to the business’ product quality or competency in performing services.
Web Site Anti-Malware Scan
GeoTrust is the world’s second largest digital certificate provider. More than 100,000 customers in over 150 countries trust GeoTrust to secure online transactions and conduct business over the Internet. Our range of digital certificate and trust products enable organizations of all sizes to maximize the security of their digital transactions cost-effectively.
The GeoTrust Web Site Anti-Malware Scan includes a daily malware scan to detect malware and alert you with detailed information to respond quickly to the attack. What happens if malware is detected on this web site? If malware is discovered, the GeoTrust Web Site Anti-Malware Seal no longer displays. When the scan confirms that all instances of malware are removed, the seal displays again.
If you feel that you have been a victim of real estate fraud, there are many resources available for you as the victim. Your first step is to contact the local District Attorney’s office and report the incident. Our office will stand by you and provide any relevant information to support your claim. Here are additional agencies that can assist you and provide more resources: