Are you planning on adding new rentals to your portfolio of investment properties this summer? If so, you may be considering investing in a new rental market that you’ve never invested in before.
Before investing in a new rental market you should first do your research and be prepared to make your investment by following these tips.
Job Growth Compared To Vacancy
We look deeply at the job growth of an area and compare those figures to the local vacancy rates. When you can find an area that is growing without an oversupply of rental homes, it is in most cases a good indication of not only fewer days on market, but also potential rental rate escalators. – Mike Tamulevich, Marketplace Homes
Standard Local Market Demographics
When we get an investment financing request in a new market, the three local market demographics we focus on are appreciating versus depreciating neighborhoods, school ratings and crime ratings. While we also look at household median income and access to jobs, those factors can be harder to compare from one market to another. School rankings and crime rates are easier to compare on a national basis. – Beth O’Brien, CoreVest Finance
Economic And Population Growth
An area that is growing economically, in population or even just in demand as a destination will offer far better chances for appreciation. The fastest appreciating areas are those that have been recently “discovered,” that many people now desire and often where there is a backlash against further growth. “Nimbyism” has a lot of downsides, but price appreciation is not one of them. – Sean O’Toole, PropertyRadar
Major Retail Trends
A few of the indicators I look at are what retailers are existing and what new ones are coming to the market. If it’s a new development, I validate with the actual retailer to make sure they are coming. Do your homework. Another great resource is the local building department, where you can learn what stage a development is in and if they have actually submitted their plans.
Contact RPM Central Valley
To learn more about how to buy a rental property in a new market, or to speak with us about our property management services, contact RPM Central Valley today by calling us at (209) 572-2222 or click here to connect with us online.