Looking for a good investment? Experienced real estate investors know the tell-tell signs of a rental property that will provide the best possible return on their investment dollar for their short-term cash flow and long-term passive income.
So why not turn to the experts who follow a recipe for success? We’ve gathered the key ingredients that you need to know to determine if a Michigan rental property is a good investment.
Know the Market
Strong familiarity with the Michigan real estate market, future city plans that influence the property’s value in the area you’re interested in, and any economic developments that would add significant job growth. Plans to develop shopping, medical, business centers, parks, or schools are positive signs of anticipated expansion and indicate further demand for rentals nearby. Long-term tenants like families seek out rentals near the best schools, and while the monthly cash flow is a bit lower, turnover is much less frequent than with shorter-term rentals.
Another thing to look for in a Michigan rental property to help ensure that you’re making a sound investment is to find the right neighborhood. You, or a trusted representative like the professional investors at Providence Homebuyers, must go to the physical location and have a good look at the property, spending time outdoors to ensure no foul smells or disturbing noises are coming from any surrounding properties. Another essential factor to concern yourself with as a responsible landlord is the crime rate in the area.
No Major Repairs
One of the things it’s helpful to know about potential rental property investment in Michigan is to avoid properties with significant problems, especially if you lack construction experience and are at the start of your investment business journey. While a fresh coat of paint and some new flooring or countertops can quickly improve a property, you need to ensure that the foundation beneath your feet is solid. Without a professional inspection, you should be ready to take on the financial risk of major structural repairs and have the time and extra funds available for rehabilitating a property.
Available Rentals Nearby
You should also know if the rental property in Michigan is the vacancy rate in the area. If vacancy rates are high nearby, this is an indicator that there is little demand for rentals, and you should move on to another section of Michigan.
Long-term value is a critical factor when you’re evaluating rental property in Michigan because well-researched investments will provide you with a comfortable cash flow in your retirement. In addition, a history of solid home sale values and long-term rental income for the area, or hints that show a neighborhood is in the early stages of revitalization, demonstrate the investment will hold value. Finally, long-term value also comes into play when your investment strategy calls for you to cash in on your equity in the future and exit the investment.
Cash Flow Potential
The bottom line for investors in rental property in Michigan is the potential cash flow. Experienced pros, like the professional investors at Providence Homebuyers, know the winning formulas and punch in the numbers before purchasing rental properties. If the gross income minus any mortgage payments and expenses don’t add up to positive cash flow, savvy investors do not buy the property, and it’s that simple.
If you want to find out if a Michigan rental property is a good investment, why not work with a professional investor from Providence Homebuyers and avoid making costly errors with your hard-earned investment dollars. Don’t forget to ask about our current inventory of the best investment property available in Michigan. Contact Providence Homebuyers today at 3132171075 to learn more!