What makes the best rental?

Question

My question:
What variables make the best rental?
*2 bedrooms vs. 3 bedrooms
*1 bathroom vs. 2 bathrooms
*yard size/porch area
*no garage vs. 1 car garage vs. 2 car garage

My demographics:
Ocala is full of older people, lots of people retire here.  There are still plenty of families here, and lots of them have kids.  My husband and I are trying to decide what is better to buy as a rental out of the above factors.  I can see young families with no kids or 1 kid renting a 2/1, I can also see older couples renting these. But larger families would want 3 bedrooms and preferrably 2 bathrooms, and a yard or porch for family time and play time.  We also have to keep in mind what ppl will want to buy when we're done renting and go to sell it.

What do you look for when choosing a rental?

N/A N/A · Answer

Thanks so much for all the info!  All of your advice really helps.

Lynn Z · Answer

I'm finishing up a rehab I bought because it was a 3/1 and wouldn't sell despite the best agents in town.  People I ran into that saw the house said they adored the house but couldn't see 1 bath so that advice is so correct.

Walk into the property manager's office of an old established real estate company in your area.   Ask what a 3/2 or a 4/2 rents for--they know and they can afford to "under rent" because a lot of their properties are paid for.  Normally most of ours have mortgages.

I'm having trouble  renting my  perfect 3/2 at $1350 but my sister is renting up 4/3 and 4/2 for $1500 and $1650.  We're in a university town.  If you're outside of what these folks (and their parents) consider "too far" --say 2.5 miles instead of 2.0 miles--you're out of that rental market.

Townhouses (especially two story) and difficult to rent for over $750 no matter where they're located nor what you paid for them. I had one for 3 years and sold it because it was a "hard" rental and limited market.  Average condominium sales in our area has historically been in the $70k's but everyone and his brother developer is building, converting and high rising to reach 250k-500k buyers that may or may not be out there.

It's quite risky right now.

Eric Medemar · Answer

great responses so far I would also like to add buying at a below market value price.  also I have found that finding duplexes in area of single family homes to work out good because the areas seem to appreciate faster than areas that are primarily rental, buying in areas that have a consitant rent rate accross the board also works out great, problems can be experienced if you buy in an area where many of the apartments are owned free and clear, those landlords can afford to have tenants pay below market value on rent, which can drive tenants away from leasing your unit.  These are just a few of the things that I have experienced that many investors seem to overlook.  these are just my experiences others may have different opinions.

I have found that 3 bedroom homes are the eisiest to rent, but I dont rule out anything if it can be bought right.  If I can buy low then I can rent lower, and keep tenants longer and fill vacancies sooner.

Frank Adams · Answer

Like lots of other questions in this life; IT DEPENDS.

Look and see what builders are building and SELLING. In an area with a lot of older (like me) folks I would think that 2/2 patio (zero lot line) homes might be a good bet.

The don't like yard work
They've probably "downsized" and sold all the crap they were keeping in a storage facility.
Smaller house equals smaller utilities.

The downsize is that this demographic is made up of a lot of people from the RICHEST generation that ever walked the earth, so they tend to buy,not rent. Also, despite having the money (this might be a reason they have the money) they are loathe to spend any of it, they're cheapskates!

The two patio homes that I had were among my best rentals as far as keeping the same tennant long term went. And keeping tenants long term, no turnover costs, is the way to good income.

BTW, one bathroom houses have been considered OSBOLETE (I think this is from the American Society of Archetects) since about 1979. The only one bath houses I've ever bought I had a plan to add at leasat a 1/2 bath before I ever signed an offer.

We never had kids, and even when we were pretty poor we NEVER considered a one bath house.

all cash

Judy Ryon · Answer

I think a 3 bedroom is generally easier to rent and re-sell, over a 2 bedroom.

Ryan Webber · Answer

The number one variable in a rental is Price vs. Rent.  Bottom line.

From what you've said, it seems like you would have a market for everything you've listed.  I would focus on finding rentals that fit your price vs. rent ratio and not focus so much on finding a certain particular type of rental.