By Paul Branton, Director of Investor Services
I know you’ll agree… this summer has been pretty much like many of the summers in recent years… Yeah, Riiiiight. While 2020 hasn’t been the same with respect to much of anything in summers past, it’s been about the same in our local real estate market.
The temperatures and the real estate market both start to heat up in May and continue to stay HOT until late August. That being said, for about the last 4-5 years, I don’t think the market has cooled off quite the same as the weather.
At present, with inventory being at about a one month supply, it continues to be a seriously strong sellers’ market. Most of the “number crunchers” out there agree that a “balanced market” is anywhere between 4-6 months of supply. And we haven’t seen that for some time now.
Despite the prices and the pandemic at hand, we have been successfully helping both new and current clients acquire, renovate and lease up great investment properties across the metro. In fact, just this past week we had two investment properties that closed. One house was in south Olathe for a long time client, and the other was in south Overland Park for a brand new client. Given that we just helped these two clients determine what would be a great rental investment, I thought I would share some key points that we look at when analyzing properties.
- Is the property close to desirable amenities?
(Grocery store, QuikTrip, Restaurants, Highway Access, Parks etc.) This is a PRO
- Does the property sit close to or on a busy street?
(Facing NALL, backing to 119th etc.) This is a CON
- Are there any rental restrictions?
(City, HOA etc.) PRO or CON
- Are the backyard/front yard and driveway flat?
- Is there a fire hydrant in the driveway?
- Does the property have options nearby for schools that will attract families?
- Families tend to stay longer which lowers your turnover and vacancy expense.
Updated Kitchen & Bathrooms:
- Have the kitchen and bathrooms been updated recently? If not, can you factor that into your budget?
- Updated kitchens and bathrooms help increase the rental rate and lower vacancy.
Patio vs. Deck:
- Does the property have a deck or a patio?
- While decks are great, they are simply more expensive to maintain.
- If the property has a deck, can it easily and cost effectively be replaced with a patio?
- Where I argue against decks on investment property due to the expense, I argue for fences regardless of the expense.
- If the yard is fenced you will have an easier time renting the home. i.e. lower vacancy.
- Over 65% of renters in our market either have kids or pets and they are looking for this amenity.
- This is another one that will help lower vacancy and turnover.
- While it doesn’t always boost the rental rate, it certainly increases the overall appeal to renters in our market.
- Last and certainly not least, we provide the projected rental rate by way of a $100 range….$1350-1450, $2150-$2250 etc.
- This allows our clients to make solid, informed and calculated decisions when making the offer and negotiating the deal.
If you have a property you are considering as a rental investment, let us know! We would be happy to provide a projected rental rate or answer any other questions!
Paul Branton, Director of Investor Services
Home Rental Services, Inc.