Top Things You Need In A Rental Property
When searching for a new rental property, there are top things you need. Colorado is a growing market with excellent potential for investment properties, as long as you know what to look for in a rental property. Many factors come into play when hunting for a new rental property. In today’s list, we will discuss some of the most significant factors that will help you find that perfect rental property and get your investment portfolio off the ground!
Rental Property: Location
Location can be a make or break factor when getting optimal returns on your investment. The location of your property is crucial because you want to make sure you are an investment in an area experiencing growth and expansion. This factor is vital because, in these areas, the homes’ value is higher, allowing you to charge more for rent. In addition, it also ensures that your property will always be in demand.
The Colorado market is multiplying but can be a tough market to break into. Be prepared to wait and search to find that perfect rental property. The Colorado market is such a profitable market to get into as prices are not coming down any time soon.
Rental Property: Property Taxes
Property Taxes can be an investment killer depending on the state and city. Property Taxes is something you will want to research and check by city and see which cities offer the lowest rates. These Taxes are responsible for maintaining and fixing the city, so the rates vary drastically from city to city. Once you know the fees, this is something you will want to take into consideration when evaluating your new investment property.
Colorado has the middle of the road when it comes to Property Taxes. As you get closer to Denver, the rates will increase. Heading into Northern Colorado, you will notice that rates will drop. For example, Boulder has a high Property Tax as compared to Greeley.
Rental Property: Home Values
Home Values are an obvious factor when selecting the right rental property. When evaluating home values, keep the market and what you hope to charge for rent in mind as they need to correlate. Typically you want to charge at least one percent of the total value of the home in rent. It can be challenging to achieve depending on the value of the house and what the market is dictating. Do your homework and research each area you are searching in thoroughly to ensure you are going to be able to achieve your investment goals.
Colorado has an attractive market for investment properties. The ROI, Return On Investment, can be extremely high in the current Colorado market. You will need to be smart about where you are trying to purchase this property, as certain areas are over-saturated here. Allow yourself plenty of time to research each city and make sure you are making the correct decision.
Return On Investment
ROI, Return On Investment, is the number one factor you want to look at when starting your investment journey. ROI is what you will be netting each month in profits. Determining your ROI can be difficult at first, but considering all the factors we spoke about will give you a clearer picture. As we said before, typically, you will want to charge at least one percent in rent. You will also want to consider operating costs, repair fixes, and remodeling costs. You will need to factor all these into your total ROI and upfront costs and ensure you are not starting in the negative!
Colorado typically has a very high ROI for rental properties, but you do have to be aware of the home values and the rental markets here. The home values in Colorado can be exceedingly high in some areas, and it will be hard to charge one percent for rent. Taking your time and doing plenty of research is critical here.
Searching for the perfect spot for your rental property can be challenging in Colorado. Let me help you with my expert knowledge and love for all things Colorado.
If you are new to the area or looking to upgrade your home, please get in touch with me and allow me to help you with your search.