Before investing in a rental property, knowing what to avoid is just as important as knowing to look for.
In this post, we share four aspects of rental properties you should avoid before making your real estate investing decision.
One-bedroom rental properties often mean the property is a townhome or condo, not a single family home.
If you are just beginning your real estate investing journey, a one bedroom condo may be all that you can afford to purchase!
However, one-bedroom properties take longer to rent those those properties with multiple bedrooms, demand is lower, and turnovers occur more frequently.
You won't find many long term successful real estate investors that have a portfolio made up of one bedroom condos.
Too Many Bedrooms
Conversely, you also don’t want too many bedrooms.
Properties with too many bedrooms (anything greater than four) become difficult to rent as it will only appeal to large groups of people.
We recommend investing in single family home properties that have 3 bedrooms. These types of rental property are in the most demand.
High Maintenance Landscape
Sometimes real estate investors focus too much on the inside of a property without giving enough attention to the exterior.
Ideally, you don’t want any type of landscape that will require a lot of maintenance. Choose what will make the property look attractive, while at the same time taking minimal effort, time, and energy to maintain.
Extensive or expensive landscaping on a property increases the risk of damage and requires more upkeep.
Unique Design and Colors
If you own your property and intend to rent it out, then it’s important to know that bold, bright, and unique colors won’t always be attractive to potential tenants. This can easily be addressed by painting over the unique colors with more neutral tones.
If you’re purchasing a rental property, try to stay away from homes that are “unique.” It can be hard to define exactly what a unique rental property is, but if after viewing the property you say something like:
“This is… odd” or, “this is…. strange,” there likely won’t be a high rental demand for this type of property.
So, if you know what to avoid in a rental property, do you know what to look for?
Play the Odds
Be aware of what a majority of renters want in a property.
From a pure percentage standpoint, the majority of renters are looking for a three-bedroom, two-bath single-family home with a two-car garage, and a basement.
Historically, these types of properties attract long-term, quality renters, which is exactly what you want!
While you may not always be able to invest in this type of Denver rental property, as you grow your real estate portfolio, do your best to find properties that will attract the highest percentage of quality tenants.
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