When you’re looking to invest in a rental property in North Carolina, the best value is not always in snatching up the newest residence in the hottest location. Home prices are booming in the Tar Heel state as populations rise, so it’s important to know what to look for to make a profit. To ensure that your property will be a source of passive income rather than its own money pit, consider this checklist of features to help you get the best value for your investment.
While the home flipping trend sounds ideal, it’s more of an end goal. Fixer upper homes are only valuable if you have the capital and experience to turn the place around. If you’re not handy or in a financial position to risk losing money on contractors and big renovation projects, it’s best to ease into home ownership. In that case, it’s recommended that you choose a property that’s more modern and less time-consuming.
Single-family homes and condos attract tenants who generally take better care of your property and provide a decent long-term turnaround. Renters who are financially stable and looking to stay long-term won’t leave you with months where you have to cover the costs of your investment.
The difference between the two properties? Condos come with exterior maintenance since they’re part of a larger group of units. Single-family units generally attract tenants who less likely to break their lease or vacate quickly.
Aligning the desirability of your property, neighborhood, and the city is easier said than done, but North Carolina is a solid investment for all three. To get the best value property, aim for homes just outside the main “big-city” areas. These have a big draw because of their distance from heavy traffic and because of their perceived safety. Your investment will only age as well as your home’s surroundings and a quiet neighborhood will always be in demand.
Existing Amenities and Possibility for Development
Farmers markets, gyms, coffee shops, etc. Anything that adds culture adds value to your property. There are tons of new residents seeking out North Carolina’s proximity to beaches and nature. Consider how lifestyle benefits add property value.
Always look into your potential property’s zoning plans. Development is on the rise as people flock to North Carolina, which could be negative or positive. Any alterations to what would attract you to a property in the first place would cast doubt over its long-term or even short-term value.
For example, close proximity to public infrastructure brings many benefits but also brings noise and new crowds. For some, a new mall adds a major amenity to your property’s location but could cost you nature and greenery that led tenants to your property.
Crime Statistics and Recency
Always research the severity of the crime in the area and the frequency. You’ll not only want to attract tenants with a reassuring living space, but you’ll also want to avoid any vandalism and resulting insurance costs that could affect your property. All criminality factors will influence the value of the home investment.
Job availability and proximity for tenants will impact how much you’re able to charge them for renting your property. With the tech and finance markets surging in Durham, Raleigh, and Charlotte, it’s safe to assume surrounding locations will have an uptick in market appeal. The sizes of companies and the popularity of the industries are also major drivers. If your property is in a more rural area, you won’t make as much of a profit.
In a hilly region like North Carolina where the land is always shifting, it’s important to understand how geography and tectonic movement could affect your home’s foundation. Earthquakes could depreciate the home’s value and might call for additional maintenance and insurance costs in the future. Hurricanes and tornadoes add their own insurance costs. Know what you’re up against.
Weigh the average rent in your prospective area, as well as the median household income and cost of living, to estimate the property value. Your property should earn you at least enough to pay its mortgage, property taxes, and insurance. Bottom line, you have to fill the property, so you can’t egregiously overcharge. While rent is rising with North Carolina’s population, there’s currently enough balance of supply and demand to keep things affordable (aka competitive).
You’ll always need an extra savings cushion for any time the property sits empty. Avoid splurging on a property if you have any outstanding loans and bills or major upcoming expenses.
While these factors will prepare you for your initial home search, it’s helpful to have a team of analytical experts constantly evaluating your home. Real Property Management of the Triad will work year-round to determine your property’s value. We’ll conduct regular inspections and assessments to find ways to increase the value of your property. Bare minimum, it will never be limited or reduced. Contact us today to see how much more you could be making on your investment property.
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