Rental properties are one of the best investments you can make. Whether you're looking to add to your retirement portfolio or want to use real estate as a means of income, it's hard to beat rental properties.
But not every rental property is created equal. Right now, single-family rentals are in the highest demand. If you know what you're doing, you can profit from this trend in the real estate market.
Today we'll look at why single-family homes are so popular. We'll also explain how to make the most money off this investment you possibly can.
Why are rentals so popular?
Rental properties are so popular because younger people are waiting longer to get married. Realtor.com suggests that this trend will continue in the coming years.
With younger people waiting to buy a house until they're married, renting is more popular. While it might not always be the most economical choice, that's how the market is trending.
In fact, 35% of the 44 million rental properties in the United States are for single families.
How to profit
With the demand in place for these properties, how can you make the most profit possible?
It involves more than just buying a house and charging a lot in rent. You want to make sure that you're renting to the right people, first.
If you don't vet your tenants, you can run into problems. Remember, tenants won't treat your rental property like it's their own home. They know they're just renting. This means you can - and should - be selective in who you rent to.
Develop your DIY skills
A big cost associated with rental properties is repairs. If you have a decent understanding of some DIY home improvement projects, you should improve that knowledge.
Being able to do a lot of minor repairs can save you hundreds, if not thousands, in costs over the years.
If you're not a DIY type, it's easy to learn.
Pick the right lease length
There's a shortage of rentals available in the United States. This means that when people rent from you, they're likely more willing to stay for a longer period of time.
However, you don't want to lock tenants into too long a lease, or they won't sign. With how often young people move - especially single families - you need to be flexible with your lease length.
A great way to pick the right lease length is to research common lease lengths for rental properties in your area. A good base to start with is at least a year.
Rental properties are one of the best ways to make money in real estate. If you have the means to buy one, it's a great investment. However, you still need some basic DIY knowledge and the ability to vet your tenants. Those steps are simple, but they can often be the difference between a good and bad rental experience.
If you're interested in single-family rental properties, feel free to get in touch with us to see how we can help.