By Paul Branton, Director of Investor Services
When you’re going to buy something you’ve never bought before, what do you typically do? Ask your friends for advice? Online research? Go to the store and try out the product in person?
Those are all great things to do and relatively easy for a new phone or even a car. But what about buying a rental property?
Do your friends currently own rental property? Where will you go for information when you research online? What store will you visit to get your “hands on” a rental property? It’s not quite like researching or buying other consumer goods or even other investments.
If you find yourself in this position, I suggest you do as one of our newest clients did. They determined the location of where they wanted to invest (Johnson County, Kansas) and then they called up the best property management company they could find in that market. Since we’ve been in the market for over 30 years, we have a depth of experience and local knowledge that friends and those online likely do not.
How exactly did we help these new clients?
- Provided the clients with a target market at their desired price point of home.
- Invest in these cities/subdivisions/school districts
- Informed the clients of the anticipated rental rates of homes they were considering.
- Visited the property during the mechanical inspection and sent them a report.
- Gave the clients estimated costs for repairs/improvements to the home.
How did things turn out?
- The clients invested in one of the areas that we recommended.
- The home rented within the estimated rental range. (in less than a week!)
- Rent Range was $2,650-$2,750
- Rented at $2,745
- The repair quote came in within 1.5% of our initial estimate.
- Estimate at inspection was $1,650
- Actual Bid was $1,670
If you like how this new client’s story turned out and want to buy a rental property as an investment, do yourself a favor and call a seasoned property management professional… before you put anything under contract.