Are you planning on buying a rental property that’s located out of your city or state? If so, you’ve come to the right place! In this article, we will share with you several tips you can use for buying a rental property that’s located in a new market.
What to Review When Buying an Out of State Rental Property
Job Growth Compared to Vacancy
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 the 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 tips for buying a rental property out of state, or to speak with us about our property management services, contact us today by calling (209) 572-2222 or click here.