Since about 36% of American families are renters, identifying and buying good investment properties is a great way to make some passive income. To do this, though, you'll need to find those with a high property value and great rental income potential.
Read on to learn how to identify great opportunities for your real estate portfolio and get more money as a landlord.
Choose an Investment Type
Before choosing the type of investment properties you want, think about your objectives. Some people want a passive income from renters. Others want some fast cash from flipping the property and re-selling it in better condition.
Talk with a professional property manager about your goals in real estate investing and get tips on what types of properties best meet your needs.
Generally, you have two options.
Residential properties are those that you rent out to individuals and families. They include:
- Single-family homes
- Homes with multiple family units
- Apartment buildings
- New construction homes
- Luxury houses
Commercial properties are rented out to businesses and organizations. Some types to look into are:
- Office buildings
- Retail stores
- Warehouse space
- Industrial plants
- Restaurants and cafes
Diversification is important, so don't be afraid to choose multiple property types for your growing portfolio. For example, if you already own and rent out residential properties, consider switching things up with an office building.
Consider Location for Investment Properties
There are several different locations within Santa Cruz, California.
Neighborhoods close to the University of California Santa Cruz are usually excellent because you can rent to college students.
Other beachside areas like East Cliff and Capitola Village rent out for more money because they're near the beach. This makes them ideal for vacation rentals.
Those investing in both residential and commercial real estate should consider higher-end, family-friendly areas like Cypress Park and Village Highlands.
When choosing an investment property location, choosing an area that's appealing to renters means that you can collect more rent each month. It reduces vacancy, too.
Know the Local Market
When choosing an area, evaluate the local market of the residential or commercial investments you choose. Looking into property market trends means considering:
- The current potential for rental income
- How competitive the market is
- Whether the location and property type are in demand
- Future growth projections
- What local amenities might make it more desirable
Understanding the local market also makes it easier to find properties that will appreciate over time. This means that the asset value will increase as the years go by.
Assuming that you keep up with maintenance and renovations, you can rent it out for more in the future. You also will get more money when it's time to sell your investment and move on to newer and better things.
Enlist Expert Help for Real Estate Investing
Now that you know how to choose the right investment properties for your portfolio, it's time to start boosting your real estate portfolio.
Professionals at PMI Santa Cruz are committed to helping you identify potential investments by assessing property market trends and finding lucrative assets.
Request a free rental analysis to learn more about how you can boost rental income potential.
