The largest housing markets in the country are included in the list of most expensive cities in the world with both 52 sqm in Sydney and 97 sqm in Melbourne being priced at US$1 million, according to Knight Franks 2019 Wealth Report.
Monaco remains the most expensive city in the world, with 16 sqm of accommodation the equivalent of a bedroom in a luxury home costing a whopping US$1 million. Hong Kong came in second, with US$1 million enough to buy only 22 sqm of property. New York and London, meanwhile, tied at third place with 31 sqm of their properties being valued at US$1 million. The report also found that currency fluctuations over the past year have made prime properties in Australia more attractive to foreign buyers. Throughout 2018, prime properties in Sydney rose 3.1%, but with a stronger US dollar, the overall impact of the currency shift led to a 7% decline in prices for buyers purchasing prime residential property in Sydney with US dollars. Looking at the impact of currency fluctuations on prime residential prices across the major Australian cities over 2018, the end of the year saw a price discount of 7% to 8% for those purchasing with the US dollar, 9% to 10% for those purchasing with Japanese Yen, whilst those purchasing with Renminbi currency saw a reduction of 2% to 3% over the same time, said Michelle Ciesielski, head of residential research Australia at Knight Frank. When currency is factored into the sale price, we can often see a significant variance in the sale price for those purchasing residential property in Australia. When the US dollar appreciated drastically against the Australian dollar, enquiries from high-net-worth expat clients rose. These prospective owners took advantage of how much more luxury residential property can be purchased, according to Ciesielski. The report showed that at the end of 2018, US$1 million could buy a 52 sqm of prime floor space in Sydney 4 sqm more floor space than we recorded at the end of last year. Lehman Brothers collapsed in the Global Financial Crisis a decade ago, and during that time, 86 sqm of prime residential property in Sydney could be bought with US$1 million 34 sqm more than what could be snapped up at the end of 2018. Back in 2008, US$1 million could cover for 155 sqm of space in Melbourne. The figure has tightened to 97 sqm in December 2018 but is more than the 90 sqm at the end of 2017. The amount of US$1 million could score a 123 sqm in Brisbane down from 160 sqm in 2008. Gold Coast also recorded that US$1 million could get 136 sqm at the end of 2018, compared to 173 sqm in 2008. Perth, on the other hand, has reported an increase in the amount of space US$1 million can buy from 109 sqm in 2008 to 116 sqm as at December 2018. While this only represents seven additional sqm of space, it presents an opportunity for buyers in the luxury residential space given at the height of the decade-long resources boom in June 2011 only 71 sqm could be purchased with US$1 million, said Deborah Cullen, partner and head of prestige residential Australia at Knight Frank. Whether you are looking to buy your first home, move home, refinance, or invest in property, a mortgage broker can help. Access loans from all the major lenders, get help with paperwork plus there is no charge for this service. Get help from a local mortgage broker https://www.yourinvestmentpropertymag.com.au/news/how-far-does-your-dollar-go-in-sydney-and-melbourne-261682.aspx
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Five of the top 10 areas with the lowest rental vacancy rates in 2018 were in Tasmaniawhere the market has been holding up in recent years. Three areas in the top 10 were in Canberra, one Queensland and the other in the Northern Territory, according to figures from SQM Research.
Renters in Tasmania are having the hardest time looking for a dwelling, but the low rental vacancy rates should not be enough to woo investors, according to a report by The New Daily. Tasmania has a low vacancy rate, but I think that is set to change because in the last few years it has attracted a lot of investor interest, maybe too much. Its had a lot of growth, and thats been underpinned not by locals, but investors from interstate. For every five people that move to the state one job is created, so the fundamentals arent strong, because it has been so attractive. So I would expect vacancy rates to increase significantly, Anna Porter, property advisor and principal of Suburbanite, told The New Daily. Canberra also stood out on the list. There is still a lot of transitional employment in Canberra, a lot of short- to medium-term job opportunities, and there is a shortage of rental shock. There just isnt enough stock. Were hearing stories of agents putting up sold stickers on places and people ringing that day to see if the property is going to be rented out, Porter told The New Daily. Investors have not given much attention to Canberra due to its land tax rates which are higher than most other states. The competition, though, counters the high tax, according to Porter. Property Investment Professionals of Australia Chairman Peter Koulizos warned that vacancy rates are only one of the factors that investors should consider when purchasing property. Capital-growth prospects, the strength and diversity of the local economy, supply and demand from buyers and renters, new construction which may negatively impact the market, and cash flow, must also weigh on investors decisions when buying properties. An informed investor will expect the market to go through peaks and troughs, said Koulizos. That means they dont easily get spooked by less than stellar data. Instead, they continue to treat their tenants well and with respect, so the chances of their properties becoming vacant are minimised, he said. State Region % TAS West Hobart 0.1122 TAS East Coast of Hobart 0.1957 TAS East Hobart 0.2888 QLD Queensland Far North Coast 0.4757 ACT Tuggeranong, Canberra 0.4797 TAS Central Hobart 0.4946 ACT Belconnen, Canberra 0.5313 ACT Gungahlin, Canberra 0.6570 NT Southern NT 0.7317 TAS Burnie 0.7533 Source: SQM Research Can you afford to buy in this suburb? Find out how much you can borrow https://www.yourinvestmentpropertymag.com.au/news/revealed-regions-with-lowest-rental-vacancy-rates-261681.aspx Youve decided. Youre sure you want to invest in real estate.
But why? Without being clear aboutwhy youre actively choosing to invest specifically in real estate, your chance of success looks bleak. Often I hear wannabe investors say, I want to get involved in real estate because I hate my job. But this is also a job, and one that requires work. You wont be sipping Mai Tais on a beach on a regular basis anytime soon. Just get a new job! There are other jobs out there. Other would-be investors say, I want to get involved in real estate investing to make money. But investing simply to make money isnt a good enough motivation, because there are days where youre not going to make money and there are days where youre going to experience setbacks. Think instead about what you want to do with that money. College tuition? Retirement? Leave a legacy to your heirs? You need a reason beyond making money thats substantial enough to motivate yourself to press on in the face of challenges. [embedded content] Related:Why Investing in Real Estate Just for the Tax Breaks Can Be Unwise (& Downright Dangerous) Why Do You Want to Invest in Real Estate? If you can relate to any of the following things, you are making the right decision: You have a passion for it. You love the creation or renovation process or want to put roofs over peoples heads. There needs to be a facet of real estate that you enjoy.Youre determined to take back your time. Real estate investing can give you back timeeventually. You can earn income thats not directly correlated with how much time you put in, as opposed to trading hours for dollars. But you need to understand this isnt going to happen overnight.Youre committed to building wealth.And there certainly is a wealth-building factor to real estate. However, its not a sprint and there isnt instant gratification. But over time real estate investing can create millions of dollars for you if you play your cards right, do the right thing, invest in the right properties, and get a little lucky. Those are three great reasons to invest in real estate. Choose another outlet if none of those apply to you. Watch my video above to hear a little more about why you should or shouldnt dive in. Why are you choosing real estate? Let me know in a comment. https://www.biggerpockets.com/blog/why-invest-real-estate BiggerPockets Money Podcast 63: Financial Freedom With 5 Kids IS Possible with Jordan Klint3/12/2019 One of the most common misconceptions of financial independence is that you cant do it with kids. ButJordan Klint doesnt listen to what other people say. He became financially independent with kidsand not just one or two of them. He did so with five children.
Oh, and did I mention hes only 33 years old? Jordan and his wife started flipping houses soon after they began dating and havent stopped. Theyre now teaching their five children the value of investing, as well as how to be landlords and make repairs. They do this all while home-schooling them and continuing to find and purchase new properties. Jordan also shares how he was prepared to quit his job outright but his employer begged him to stay for special projects, allowing him to continue to work as an engineer. Its something he loves but is now doing on his own terms. Jordans story is 100 percent repeatable! In this episode, he lays it out in such a way that you can both be inspired and apply his strategies to your own life. Click hereto listen on iTunes. Listen to the Podcast HerePodcast: Play in new window | Download Subscribe: Apple Podcasts | Android | RSS Watch the Podcast Here [embedded content] Help Us Out! Help us reach new listeners oniTunesby leaving us a rating and review! It takes just 30 seconds.Thanks! We really appreciate it! Podcast Sponsors The all-newFreshBooksis accounting software that makes running your small business easy, fast and secure. Spend less time on accounting and more time doing the work you love. For a 30-day unrestricted trial, go toFreshBooks.com/bpmoney Second Sponsor A leading rehab lender, Rehab Financial Group is run by knowledgeable and experienced lenders who are eager to help real estate investors succeed on their next rehab project. They offer competitive rates, interest only payments and no prepayment penalties or fees on our rehab loans. Check the Flipping Houses 101 Guide today by visiting rehabfinancial.com/biggerpockets or call 610 632 8695 In This Episode We Cover:Jordans journey with moneyHaving a 20-year deadline working for somebodyCo-op programHis financial position in terms of income and assets upon graduationHow he and his wife approach their personal financeInfluenced by Dave Ramsey on avoiding debtWhat his underlying principle isHow he started flipping housesHow helpful YouTube isWhat Jordan and his wife did prior to having kidsSaving about 50% of their income for savings and investmentsWhat their life looks like after having their first kidOn childcare expenseThe structure they changed as his family grewThe importance of having a planThe time he became intentional about building passive incomeTheir first deal and the passive income they producedHis principle of having better tenantsWhat happened after he bought his first rental propertyOn quitting his full-time job and going part-timeHow they changed their spendingHis lifestyle expensesOn healthcareHow he motivates other employeesAnd SO much more!Links from the ShowBooks Mentioned in this ShowTweetable Topics:You can get over all these little hurdles if you just have that mentality. (Tweet This!)You dont have to be naturally handy, you can just watch somebody do it and its not that hard. (Tweet This!)Quickly you lower that spending side, the quicker youre gonna get to it on the passive income side. (Tweet This!)It is so much easier to cut a dollar of a spending than increase a dollar of income coming in. (Tweet This!)Connect with Jordan https://www.biggerpockets.com/blog/biggerpockets-money-podcast-63-financial-freedom-5-kids-jordan-klint/ It happens all the time.
Your sweet 24 year-old renter (lets call her Wanda) is the perfect tenant. She pays her rent on time, doesnt treat the property badly, and she doesnt even have any pets! Then Wanda meets Tony (cue the horror soundtrack). Tonys a classic good-fer-nuthin bumhe never saw a bill he wanted to pay on time, he limps between dead-end jobs, he drives a 70s muscle car and has a pit bull with a spiked collar (unoriginally named Spike). Tony gets himself evicted from his ratty apartment because thats the kind of person he is. Wanda, being a sweetheart, cant let poor Tony sleep on the street! So she lets him crash for a few days while he gets on his feet. We all know how this story ends. Tonys still there six months later, and your property has suffered accordingly. Spike has made it his personal mission to urinate in every corner of your unit, Tony smokes suspicious substances inside, theres trash everywhere, and the cockroaches have started sniffing around. In uglier scenarios, maybe hes even dragged Wanda down to his level. Maybe shes picked up that crack pipe too and has started taking liberties with her rent payments. Thats actually not even the most nightmarish scenario. What if Tony is a violent sociopath with a history of assaults? What if Tonys a pedophile? Maybe Tony cooks meth, and decided your property is the perfect place to set up his cooking lab? The point is, you dont know Tony, or Spike for that matter, because they were never screened and they arent on the lease. So how can you avoid Tony, Spike, and all the other deadbeat tagalongs whod love to set up camp in your rental unit? Related: 5 Legitimate Reasons to Allow a Tenant to Break Their Lease It Starts With Tenant Screening Some states prohibit landlords from just coming out and asking applicants directly if theyre in a relationship. So rather than open that can of worms, start by simply setting expectations: Anyone who spends more than five nights/month in the rental unit must be included on the lease. Is there anyone else who will be staying over sometimes at the property? If they waffle, with answers like Well, sometimes or Uh, I dont know, maybe some months? ask them to please have this person fill out a rental application too. Should they object, politely explain that anyone who spends five or more nights/month at the property must be screened and sign a lease like everyone else. Property policy. Its out of your hands. Be especially wary if a couple shows up together to view your vacant property, but only one person says theyll be living there. Dig deeper, and ask plenty of probing questions. It is your businessknowing who is living in your investment properties is the literal definition of your business. Lastly, if everything checks out when you verify their income, housing history, credit history, criminal history, etc., drop by their current home. If two people live there and you dont feel 100 percent rock solid about their story, decline the application. (Read up about more advanced tenant screening techniques here.) It Continues With the Lease Your lease agreement should be a solid shield, protecting both you and your property from harm. You cant anticipate every possible way that renters can cause financial damage to you and your propertybut you can anticipate the most common 99.9% ways you can be burnt and use lease clauses to protect yourself. Case in point: squatting boyfriends. Your lease should have an occupancy clause saying (in appropriately dry legalese) that no one but the listed tenants and occupants may spend more than five nights/month at the property. If any non-listed persons do spend more than five nights/month at the property without written permission from you, the renter is in breach of lease and is subject to additional screening fees, higher rents, and/or eviction. Related: The True Cost of a Bad Tenant: Why You CANT Afford Not to Screen [With Pics!] Five is not a magic number, and no ones proposing that if your renters boyfriend spends a sixth night there one month that you should rally the townsfolk to grab their pitchforks. But you need to draw a line somewhere, and you need make it crystal clear that unauthorized occupants constitute a breach of lease that will be punished. Severely. One More Reason to Make Inspections You should be inspecting the rental unit at least every six months. Do you? If not, then start. Beyond an occupancy clause, your lease should also include an inspections clause, informing the tenant that a manager will be coming by the rental unit at least twice each year to check on the propertys condition and tenants compliance with the terms of the lease agreement. Make sure to check your states laws on performing inspections and any notice requirements before entry. How would you know that the renters arent cooking meth otherwise? Or running a puppy mill? Or just dirty people, who you dont want to renew the lease with? Coming by the property with proper legal notice not only reassures you that the tenants are treating the property well, but it also sends a loud message. You do not tolerate breaches of your lease. You are not an absentee landlord. It also lets them know you care about the property and want to keep it in good condition. What Happens if Your Renter Is Shacking Up? Life happens, right? Maybe Wanda only dated Tony briefly before realizing what a bum he was, then met her soulmate William. Williams a sweetheart himself, works a good job, and (yay!) they just got engaged. The proper protocol for renters who want to move a roommate or boyfriend into the property is to call their landlord and discuss it with them (you) first. Yes, its that simple. For landlords, the proper protocol is to thank the renter for being forthright about it and emailing them a blank rental application for the proposed new tenant to fill out. Or if you caught them being sneaky, sending a breach of lease notice. Youll have to use your own judgment about whether its worth letting the new occupant applyor whether you want to evict them both over it. Regardless, you can then screen the new addition like any other tenant. If they look good, require both tenants to sign a new lease agreement (for a full new lease term). Consider charging higher rent, especially if the new tenant is bringing a pet with them or they were sneaky about moving in the boyfriend. If they dont pass muster, reject them. That may mean your renter moves out, but its better to lose one good tenant to avoid a walking liability. The world is full of great renters; lease to honest, responsible people, and youll find that being a landlord is the easiest job in the world. Lease to deadbeats like Tony, and youll discover that being a landlord is not only the most aggravating job in the world, but also the most expensive. Were republishing this article to help out our newer readers. Ever had a tenant pull a fast one on you? Maybe youve dealt with a Tony of your own? How did you handle it? Dont leave us in the dark! https://www.biggerpockets.com/blog/discourage-tagalong-boyfriends Have you ever had an idea brewing in your head for years and then woken up one day and decidedno excusesyoure going to just do it?
And you do, going so far as to execute it with the fervor you had dreamed about. Youre unstoppable! This is the attitude I had the day I jumped into real estate full time. However, after rehabbing a few properties, my progress came to a standstill. I was held up by the second-to-last R in the BRRRR strategythe dreaded refinance. I wouldnt have more cash to deploy in more deals until I was able to refinance. Limited capital is the single biggest reason newbie investors are unable to scale. But I wanted to avoid knocking on the doors of private lenders or exploring partnerships. To keep growing my real estate portfolio, I had to find more capital within my existing properties. And I did! How? Through the power of home equity. In one year, I grew my portfolio from three to 20 properties by turbo-charging the BRRRR strategy with home equity loans. How Does a Home Equity Loan Work? As the economy has improved during the past few years, most of us have seen our property values riseespecially in the hottest real estate markets. There are three ways to tap into this equity: selling, cash-out refinancing, or borrowing against the equity. If youre locked into a good interest rate, you may not want to sell. This is when exploring home equity loans is a viable option. What Is a Home Equity Loan? This strategy doesnt require selling your primary residence or refinancing the existing mortgage on it. Instead youre borrowing against the property, tapping into its equity. This is also possible with rental properties that are either owned outright or have high equity. With a loan secured against the equity of your property, you can free up funds to further your real estate portfolio. Home Equity Loan Rates and Other Calculations Home equity loans are distributed in a lump sum, and the interest rate is fixed. According to Bankrate.com, todays average home equity loan rate is 7.94 percent. But what is home equity, exactly? And how much can you borrow, anyway? Lets talk aboutthe concepts of market value and loan to value (LTV). For simplicitys sake, Im leaving closing costs out of these equations. Market value in simple terms is what the home is worth. Its best to hire an appraiser to determine the true market value, but alternatively, you can save around$600 and get good feel for what it likely is based on a comparative market analysis (CMA). Say you own a home with a market value of $100,000. If you own it outright, you have $100,000 of equity in it. But if you have a mortgage of $45,000, you have $55,000 of equity in it. Some lenders will lend you up to 90 percent of your equity in your primary residence. This equates to a 90 percent LTV. So, in a $100,000 house with a $45,000 mortgage, that means you can borrow: $100,000 X 0.9 $45,000 = $45,000 This is not the case for a rental property. Most lenders offer 75 to 80 percent LTV on rental properties. In a $100,000 rental house, that means you can borrow: $100,000 X 0.75 $45,000 = $30,000 Of course, these loan opportunities come with some pretty stringent conditions. For instance, it can be difficult to secure a home equity loan if you have bad credit, dont meet certain debt-to-income ratio requirements, and so on. What is BRRRR? As mentioned above, I used home equity loans to employ the BRRRR method of investing. For those unfamiliar, BRRRR stands for buy, rehab, rent, refinance, and repeat. It is one of the most powerful strategies in real estate to grow ones portfolio. A key componentof this strategy is purchasing a property that needs work. The next steps are rehabilitating it, renting it out (also known as stabilizing), and then approaching a bank for refinancing and pulling the original funds out to do more deals. BRRRR and home equity loans are the perfect match. Why? Investors who use this type of funding specifically for home renovations can deduct the loans interest on their taxes. Related:BRRRR Investing: The Ultimate Guide to the Buy-Rehab-Rent-Refinance-Repeat Strategy, Made Simple! How to Borrow Money Against a Propertys Equity Lets talk about the borrowing part. A home equity loan isnt the only way to borrow against the equity in your property. A home equity line of credit is another option. Heres a little more info about each. Home Equity Loan With a home equity loan, you can take all the cash up-front in a lump-sum payment and repay the loan over time in fixed monthly payments.The interest rate will also be fixed for the life of the loan, which is amortized over an agreed upon number of years. Home Equity Line of Credit Another option is to establish a home equity line of credit (HELOC). This type of loan is somewhat similar to a credit card. Unlike home equity loan interest, HELOC rates are variable. Currently, the average HELOC rate is 6.51 percent, according to Bankrate.com. Once approved, lenders offer a line of credit up to a specified amount. Instead of a lump-sum payment, HELOCs come with a set draw period (usually 10 years) during which you can continue to withdraw money as needed. The HELOC option is very attractive to BRRRR investors, as he or she will be able to pay off this money when the property is refinanced, then repeat this process over and over. Whats even better, you only pay interest on what you use from the available funds. Which Option is Best? Having tried both, I can say that if you are using home equity loans or HELOCs as part of the BRRRR strategy, they are both fantastic tools to scale. Yes, HELOCs do give you more flexibility in the sense that you can treat your HELOC like a credit card. Borrow money when you need it to purchase and rehab a property, and then pay it back once you rent and refinance, then repeat. However, you can replicate the same model with a home equity loan. Simply utilize the method outlined above to take a loan out against the propertys equity, thereby rolling the funds into the next deal. After speaking with multiple banks about this, I have realized that local credit unions are the best bet for these loans. Reach out to several in your area in order to get the best terms. How I Grew My Portfolio With Both Home Equity Loans and HELOCs Now for the meat of the story. I used both strategies in order to drastically grow my real estate portfoliofast. Heres how I did it, step by step: Allowing Equity Growth: One of my rentals had about $150,000 in equity. We had purchased the house in an up-and-coming neighborhood, fixed it up while we lived in it, and stayed there for six years , giving it a chance to appreciate in the growing market. When we finally moved to a new home, I rented out this property and was making a pretty great cash flow.Obtaining a Home Equity Loan: I then started calling local banks and credit unions, asking if theyd be willing to take second position on this property that was now a rental. I didnt realize how difficult this would be to accomplish. But after many failed attempts, one credit union finally came through. They ended up giving me a home equity loan without even doing an official appraisal on the property. I could have opted to hire an appraiser and received a higher loan, but I still wanted this property to cash flow, so I left some equity in it.Deploying the Funds: I used this money as 15 percent down (with closing costs that came out to be around $20K) with a hard money lender who I already had a relationship with to borrow acquisition and construction funds for four single family homes. Here is what a typical purchase looked like (I rounded the numbers to make it easy): Purchase Price: $70,000 Construction Budget: $30,000 15% Down Payment: $15,000 Closing + Financing Costs: $5,000 Total Cash Needed to Purchase: $20,000 First Up-front Contractor Payment: $5,000 (repaid by lender by end of project) Refinancing and Pulling Cash Out:After I was done rehabbing the properties and renting them out, I started calling local banks, inquiring about the ones that didnt have seasoning requirements and applying for permanent loans. All said and done, when I refinanced the properties, I was able to pull out about $30,000 on average per property while still making a cash flow of $500 per month for each property. Market Value After Rehab and Rent: $160,000 Closing Costs: $2,500 Other Costs (i.e., Holding Costs): $2,500 Cash Out at 75% LTV: $30,000 (which is $10,000 more than I invested) Equity in the Property: $40,000 Rinse and Repeat: I would have been able to pay off the loan within less than a year of borrowing the money. Instead, I kept going and rolled the money to acquire more single family properties, repeating the BRRRR process again and again. And the same loan has financed my latest nine-unit acquisition. Because this worked so well for us, I took out another HELOC against my current primary residence, which we rehabbed while we lived in it. This loan will fund a 15- to 30-unit building that Im currently in the market for. Related:Whats Better, a Home Equity Loan or a HELOC(Home Equity Line of Credit?) Advantages of Home Equity Loans and HELOCs There are certainly advantages to utilizing these borrowing option, including: Interest rates for such loans are significantly lower than credit card interest rates. Ive seen some aggressive fellow investors use credit cards for down payments for their BRRRR strategy. These are much lower risk options.This debt is looked at more favorably by banks than credit card debt, giving you a higher chance of getting approved for permanent loans in the future.Most importantly, you can keep an existing property,furthering your portfolio by avoiding selling.Drawbacks of Home Equity Loans and HELOCsWould using this strategy mean that youd be more leveraged? Absolutely! It goes without saying that the deals that you do (especially in the market cycle we are in) need to be not just good dealsbut great. That being said, here are a few drawbacks: Your debt-to-income ratio (DTI) takes a hit.When you borrow money in your own name, your debt-to-income ratio goes up. If you borrow money under an LLC but personally guarantee it, your global DTI comes into play. It is harder for banks to give you permanent financing when they see that your DTI doesnt meet their standards. So, its best to only take on an amount of debt that will keep your DTI at a good level.Theres lower cash flow on properties with home equity loans, meaning they arent as profitable until the loan is paid off.It requires discipline to not consider the money that came out of a BRRRR as income and propel it to further ones portfolio.Considering Alternatives: Should I Refinance or Sell Instead?A cash-out refinance may have similar benefits to a home equity loan. Cash-out refinance simply means converting an existing mortgage into a new one at a higher amount based on the equity. It translates into a single mortgage with higher monthly payments than before because of the increased amount borrowed. The great thing about this option is the entire loan can be amortized over a longer period of time than a typical home equity loan. Plus, the interest can be fixed. The disadvantage is that the home equity loan can be paid off and the monthly payment would go away. But once you refinance, you dont have that benefit. Selling is always another option, particularly if tapping into the equity hurts the cash flow to a point where the original investment is not profitable anymore. Keep in mind, though, that closing costs and capital gains will lessen your cash-in-hand after selling a property. What are you doing with your property that has appreciated? Are you selling, refinancing, or looking into borrowing against the equity with a home equity loan or HELOC? Id love to hear from you in a comment below. https://www.biggerpockets.com/blog/home-equity-loan-grow-real-estate-portfolio The majority of renters arent looking for fancy, top-notch outdoor amenities. Simple property upkeep is more important in most cases.
But when competition is stiff or a property is lacking in other key areas, certain outdoor amenities just might attract renters who wouldnt otherwise give your property a second glance. Ive compiled a list concerning mostly townhouses and single family homes, with some apartment and condo amenities thrown in, as well. Here goes. Rental Amenities That Wow Prospective Tenants1. Covered or Assigned Parking In locations where weather can be unpredictable or parking is scarce, covered or assigned parking is a big deal. For instance, we get a good bit of hail in our area, so covered parking is highly desired to avoid hail damage. Another area I own in is susceptible to high winds and hurricanes. Garages and car ports can do a lot to attract renters in these regions. Assigned parking close to the building can be highly sought-after, tooespecially by renters who have to carry children or want to avoid lugging items such as groceries a long way. Parking in an area thats safe and reserved for only the renter is even better. 2. Fenced Yard Flowers, water features, and fire pits are all great additions to a yard, but renters may or may not have the desire or capacity to care for them. Having a fenced yard, however, is highly desirable for families with children. Its also attractive to tenants who have pets (so long as you allow those). The added privacy is a bonus for all renters, as well. 3. Storage If you have outdoor storage sheds or more closets than would be expected, be sure to mention it when advertising your property. Plentiful space to store items is a rarity for renters, even though almost everyone needs it. Storage space can be a perk for anyone who used to pay for a storage unit but is now prioritizing saving money (maybe for buying a house). Others might be in-between homes and temporarily downsizing (i.e., have way too much for an apartment). Prospective tenants who are keen on outdoor activities will also highly value a place to put their big items, like bikes, skis, camping gear, and more.And essentially everyone with lots of stuff would love the flexibility to access their extra items instantly as opposed to storing them somewhere a car ride away. Related: 12 Creative Ways to Add Major Value to Apartment Buildings 4. Keyless Entry The ease of punching in a code or waving a key fob in front of a sensor to enter a door can be a great perk. Its nice to not necessarily have to be home while a handyman comes by or a guest arrives, too. Keyless entry also cuts down significantly on lock-out calls. Systems in which you can offer handymen or other guests a temporary code, and also have a master code for yourself, are the very best option. 5. Security I own a condo in a safe neighborhood, but one where its not uncommon for vagabonds to try spending the night in the buildings. For this reason, gated entries, security patrol, and other safety features like security systems are very attractive to renters. Whats more, these features offer better peace of mind to prospective tenantsregardless of the neighborhood. 6. Snow Removal and Lawn Care Many HOAs provide snow removal, but when thats not the case, its a great idea to offer this for rental homes (whether single or multifamily). The less tenants need to do, the more bang for their buck they perceive theyre getting. If possible, also include lawn care and landscaping. Not only is this a perk for renters, you can also ensure the city doesnt fine you for having an unruly yard. It will do a lot for a property in terms of curb appeal, too. 7. Community Pools, Recreation Centers, and Parks Outdoor amenities, such as rec/fitness centers, pools, playgrounds, and parks, are extremely attractive to renters. One condo I own has a clubhouse that can be used to host events, a movie theater, and free wifi, as well as access to a pool and park.The park has playgrounds, picnic benches, and BBQs. Tenants rave about these features. Its a great way to make their rental feel more like a home. Related:13 Proactive Ways to Increase Rent & Add Value to Your Rental Property Conclusion There are plenty of outdoor amenities renters enjoy, but the interior of a property should obviously be more of a focus for investors. Nevertheless, properties that are attractive inside and outside can grab the attention of prospective tenants and give renters a reason to choose your property over others theyre considering. To get the most out of whats available on or near your property, be sure to advertise outdoor amenities well. Potential tenants will remember you for it! What are some of the most unique amenities youve encountered? Which feature do you think renters want most? Leave a comment! https://www.biggerpockets.com/blog/outdoor-amenities-attract-renters/ |
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