When you’re investing in Orlando real estate or rental properties in Tampa, Kissimmee, or anywhere in central Florida, you need to know how to determine whether a potential acquisition is a good investment.
It’s hard to remember, but the best way to do this is to think like a tenant.
Is this a property you’d be willing to rent? How much would you be willing to pay in rent?
A good investment property will be desirable to tenants. There are a lot of formulas and equations that will tell you about the profitability of a particular property. But, the bottom line is that you’ll only make money on a rental home if there is a pool of people willing to live there.
We have some tips that will help you decide if you are investing in the right rental home.
Know and Follow Your Own Investment Goals
Every investor is different, and the right investment property for one buyer might not be the right investment property for you.
Good decisions start with good investment goals.
Establish what you’re looking for and why. This will drive how you approach the market and what you look for specifically when you’re choosing the best possible property to buy.
Central Florida Investment Property Location
A good investment property is well-located. It should not surprise you that location is an extremely important factor both for acquiring your investment and for renting it out. This is Real Estate 101.
To attract the most qualified tenants, you’ll want to be in an area where there are good schools, easy access to transportation and commuter routes, and a generally peaceful quality of life.
That describes a lot of communities in central Florida, especially Orlando and its surrounding areas. Find the neighborhood that offers growth and is likely to attract your desired tenant pool.
Look for Investment Properties in Good Condition
It may seem like a fixer upper is a good investment. After all, the asking price is usually lower. And it might sound fun to turn a distressed property into something beautiful. You likely imagine the increase in value that you’ll bring about with the right rehab projects.
It’s okay to invest in a home that needs a little work, but make sure the property is structurally sound. Curb appeal is easy to fix. Cosmetic improvements are cost-effective to make. A leaking roof is not.
We recommend avoiding these types of properties unless your investment goals specifically target distressed homes in need of renovation.
Remember that the longer you spend rehabbing a rental home, the longer you go without income.
Have a complete inspection done before you buy. Negotiate concessions and repairs with the seller before you close. Buying a property with a roof that’s 20 years old means you’ll likely have to replace that roof soon. That’s an expensive repair right out of the gate.
If you’re looking for your next investment, talk to a local property manager first. You can get some good data on what you’ll earn in rent and how long it will take to rent the place to good tenants.
We’d be happy to help. Contact our team at Park Avenue Property Management. We work in Lake Buena Vista, Orlando, Kissimmee, Celebration, Maitland, Altamonte Springs, West Palm Beach, Tampa Bay, and throughout central Florida.