New construction and development in and around the city has finally begun to address the shortage of housing in the area, but with the massive amount of units projected to come online in the next five years, the question of whether or not they’ve overbuilt is a genuine one.
With the steep increase is units available that will begin to show relatively soon, we may see downward pressure on rents for the first time in a decade. Many clients of mine have begun asking if this pressure will impact their single family investment properties.
My opinion is that big developments and complexes will begin to wage war with a battle for amenities and that type of hotel concierge level service has its draws and will always draw certain tenants, usually super busy well off single professionals and younger tenants.
Personally I think that’s not the battle to try to wage as a SFH landlord. The dream of homeownership is still the number one goal for Americans and unless complexes can address the fact they share walls, the majority of tenants will continue to choose a SFH over a complex unless they can buy one of similar quality emphasis themselves.
The SFH landlord only has to consider median house pricing and the commensurate mortgage when pricing their rents and while those will fluctuate the general trend will be in an upward direction.
Needs to address:
Dogs – it is no secret that Richmond is full of dog lovers and they want the best life for their pups. Gone are the days, in my opinion, of not allowing pets in a home. It is one of the biggest differentiation you can bring to the table for someone who wants a lifestyle that works for both them and their desire to have pets; which in turn leads to stability of tenants since they are not looking for a better suited house to fit that need. In fact, allowing pets can be a lucrative bonus as well. We have moved from non refundable pet fees, and pet deposits, to pet rent. For a tenant that stays long term, those additional monies really add up!
Fences – Always, Always, Always – put a fence at your house! This can be the biggest deciding factor both selling and renting and it just makes sense all the way around to have this ready for the tenant. It leads directly to higher rents and adds value to the home as well.
Location – Richmond has skyrocketed in pricing for purchases over the last 9 years, and while there has been seasonal slow downs of late, it has not impacted the houses that we typically target for rentals in the area. Right now, we have identified some great areas that are still undervalued that bring incredible ROI, and we usually have several targets that are vetted as good buys for our clients. If you want to be on our client list to have access to these opportunities before anyone else, just call, text, or email me and I will be happy to help! Brian Hall 804-475-6643 Brian@thervagroup.com
I have always been a huge advocate for owning single family rental properties as the best vehicle for building wealth. Certainly I’ll admit I’m biased in my viewpoint but I think these key insights and differences will always keep SFH rentals as the best choice