Investing in Lehigh Valley real estate is just smart business, especially in today's market. Whether you’re looking to improve your retirement nest egg or are just starting out as a career investor, rental property ownership can be extremely lucrative. But you will have to know a few things, including how to prepare financially, how to choose a property, and tips for managing with a healthy profit.
There’s plenty of advice out there, too, citing what to do first, what not to do, and industry secrets. Before you subscribe to any of them, keep reading. Today, we’ll share the top five rental property investment tips and insights that make sense in any market condition, with any financial budget, and regardless of your motivations for investing. Start with these five tips to create your path to investment portfolio success.
1. Choosing the Right Location Matters
Regardless of your position now, one of the most important considerations with buying a rental property is location. It won’t matter how incredibly or updated the property is if it’s located in an area that is not attracting residents. You’ll want to look at a few key factors of a community before investing in property there.
Economic Development: Check with the local economic development entities to review the data and metrics. You’ll want to invest in a rental property in a community where the economy is strong, steady, or growing.
Local Population: Verify the populations of various Lehigh Valley regions over the last few years or census results. If there are significant trending declines, it’s a sign people are moving out of the area at a higher rate than they’re moving in and a red flag for owning property there.
Unemployment Rates: Unemployment rates will always fluctuate but become familiar with a community’s stats. It’s also helpful to look at median home incomes over a period of time to make sure potential residents you bring in will be able to afford the rent you’re charging.
Community Amenities: Attracting residents to your rental property will be much easier if you have a host of local amenities to promote. Look for retail, dining, nightlife, and entertainment to help you gauge your purchasing decision.
Commuting Routes & Transportation: Be mindful of transportation options, including commuting times to neighboring metropolitan areas. These will be helpful in marketing your property to commuters.
Property Taxes: Property tax bills can hollow our property revenue quickly. Before you buy any investment property, know the current and past property taxes along with those of neighboring homes and structures.
2. Understanding What’s Involved in Various Property Types
Not all Lehigh Valley investment properties will be lucrative to your financial situation and long-term NOI goals. Before leaping into new property ownership, take the time to explore the various nuances associated with different property types. Each will present its own pros and cons, short and long-term benefits, and operational management.
Single-Family Homes: From move-in ready to fixer-uppers, you’ll find a host of single-family dwellings for sale in the Lehigh Valley that would be ideal as rental properties.
Multi-Family Units: Consider turnkey condos or apartment complexes with residents and leases already in place. These may require more maintenance and property management operations but can be great additions to your portfolio.
Vacation Rentals: Capitalize on the short-term rental property boom by investing in vacation rental properties. There is no shortage of incredible vacation opportunities in the Lehigh Valley already attracting travelers. Tap into that flow of vacationers with one of these short-term properties.
Commercial Properties: Step into the commercial market with storefront property or commercial space you can lease.
3. Setting Yourself up for Rental Property Investment Success
Get honest about your finances and borrowing power. Create the to-do list of rental property management tasks you’ll soon be facing. And don’t take any purchasing steps that leave you overextended or overstressed. Stick within your limits will allow you to set yourself up for a successful rental property. Consider these aspects of your current position and draw hard lines for yourself. Stay within a healthy boundary so you can set yourself up for investment success.
Your Borrowing Limits: Talk with your lending partner about the various investment property loan options available to you. Know your borrowing power before you begin shopping for rentals, so you can stay within your limits financially.
Your Cash Flow Reserves: Cash flow is a big piece of the rental property puzzle. Know what you have in reserves now and set goals and boundaries for what you can sustain with your cash flow.
Your Time: Be mindful of how much time you have or want to dedicate to managing a rental property. Maintenance, resident calls, and marketing will all require dedicated focus. Overextending yourself with a property that will require too much of your time will lead to stress and landlord burnout.
4. Get Great at Marketing
It won’t matter how investment savvy and experienced you are in real estate, with investment strategies or property maintenance. You’ll need to get really comfortable with marketing. Your Lehigh Valley property won’t generate revenue if you can’t find and sign new residents. You’ll need to hone your skills in advertising vacancies, networking, and online engagement strategies. Here are some other marketing tasks you’ll want to become great at executing.
Walk-through Videos: Today’s residents will do much of their rental property searching online, and they’ll rely on engaging walk-through videos to show them everything.
Appealing Property Photos: “For rent” signs are no longer enough. You’ll need to get great at taking incredibly appealing photos of spacious rooms, bright lighting, and sprawling patios to attract residents.
Networking: You’ll need to immerse yourself into the networking element with local organizations, business groups, and online to stay top-of-mind for referrals.
5. Assembling Your Lehigh Valley Support Team
The fifth tip that is absolutely essential to any investment property management journey is this. Assemble the best support team to help you. There will always be challenges, obstacles, and financial setbacks. To get through them, you’ll need the strongest team of professionals in your corner. This includes:
Financial Advisor: Trust your financial decisions to a professional who understands your investment goals and can provide sound advice to help you get there.
Legal Professional: Lease agreements, contracts, and evictions will all require a well-versed and keen-eyed legal professional who can help you avoid unnecessary penalties, fees, or costly processes.
Real Estate Partners: Get to know your local real estate agents and build relationships with a few who can be helpful in referring residents and helping you grow your investment property portfolio.
Rental Property Management: To really set your investment property up for success, partner with a rental property management professional who can help you make all the important operational decisions and more. The right manager will take many of the tedious tasks off your plate, allowing you to focus on your portfolio strategy for growth and success.
When it comes to Lehigh Valley property investments, keep these tips and insights in mind. And when you’re ready to select a rental property management partner, contact the Axel Property Management team! We can help you leverage all five of these tips along with a host of other tasks, so you can experience rental property investment success at every turn!