Getting Started with Investment Second Homes
An investment second home should be attractive to prospective renters, not you.
Safety is a selling point.
Let renters pay down the mortgage on your investment.
Did you know?
In an investment second home search your real estate professional is a great source of ready information.
An investment second home is purchased for rental income and to hopefully realize appreciation in the value of the home. With that in mind the criteria for finding an investment second home becomes a pure real estate decision, unlike the search for a vacation home or retirement second home. The key issue for investment second homes is continuity of rental occupancy. The good investment second home minimizes the time the house is vacant and maximizes the amount of rent charged each month.
Three things go into finding the perfect investment second home.
It’s tiresome, but true. Location is everything in real estate and investment second homes are no exception. The location of your investment second home is probably the single most important selling point to keep the property rented and generating income. And a good location allows you to charge on the high-end of local rental rates. Keep in mind your opinion of the location as a place to live doesn’t come into play here. You’re just looking to become a landlord, not live in the second home, so the location should appeal to your targeted renters.
Two: What to Look For
Renters want easy access to the community amenities they value. If you are targeting young families it’s important to find a second home with easy access to a solid school system. Second homes close to transportation centers will appeal to renters who commute to work. If your investment second home is at a lake resort, access to the water is key.
One quality all renters look for is safety. Often areas of high rental concentration are also areas of high crime rates. Make sure your investment second home is located in as crime-free of an area as possible, and then make the house itself attractive to safety conscious renters with secure doors and windows, and possibly even alarm systems.
The best rule of thumb to follow when looking to find a location that appeals to renters is check into the quality of the neighborhood. Low crime, tidy yards and other evidence of neighborhood pride goes a long way in the eyes of prospective renters for your investment second home.
Three: How to Find the Investment Second Home
You want the perfect location that appeals to your targeted rental market. That result takes research. Look into the most recent U.S. Census reports, and maybe city provided statistics for crime rates in various neighborhoods. The Census will also give you demographic information such as ages and rent/own ratios. If you are buying an investment second home around where your primary residence is located, you can use your own knowledge of the community as a gut check to aid the decision.
The best way to help formulate what you are seeking in an investment second home, and then find the property that meets all your criteria is to work with a real estate professional. Do your background research, then talk to a pro. This is the only practical solution if you are buying out of your area, and even in familiar surroundings a Realtor knows the market better than you will after a few hours of research.