Owning investment property comes with many responsibilities. A Bellevue, Washington investor has a lot on the table to manage, including property management services, lease signings, rental rate analysis, and more. One of the most significant responsibilities you have is making sure you purchase properties that bring in a profitable ROI. Many factors contribute to the overall profitability of a rental property, and when it's all said and done, it boils down to much more than just answering the question of, "how much can I rent my house for?"
When you are considering purchasing a property, investors must look at many things: the price, the house's condition, the home's neighborhood, the yard, and so on. However, one additional factor that can also impact the success of a property is the job market. Keep reading to learn more from our Bellevue, Washington property management advisors about how to evaluate this important factor when considering a new property!
The reality is, even if a property owner thinks they should be able to charge a certain amount of rent for a property, it might just sit empty unless people want to live in the area. When renters consider a location for a new home, they evaluate areas based on job availability and growth to ensure they can make the money they need to pay for a rental home and support their families. When job markets fluctuate, investors will see renters come and go depending on job availabilities, industry growth, and other employment factors.
Seattle property management companies know that it's essential to assess the surrounding job market when buying a new investment property so that property owners can choose the rental properties in locations with healthy employment statistics. When evaluating the job market, look for various job types that can help you find renters who are an excellent fit for your rental homes.
Depending on your properties and monthly rent amounts, your homes might be a good fit for residents with entry-level positions or jobs that don't require a college degree. Other residents may already have a job, but they're keeping their eyes open for better opportunities. Having a mix of high-paying, college-required jobs and entry-level or labor jobs where the property is located will make for an appealing investment that can attract a broader pool of potential renters.
How can a real estate investor assess the job market in a specific area, like Bellevue or Seattle? One place to start your research is the U.S. Bureau of Labor Statistics (BLS). They have job outlook and employment statistics for state and local areas, giving you an idea of what the future might look like in a location where you're considering a new investment.
Another way to check out the job market is to visit the community and surrounding areas. Property managers recommend taking a trip to the library and getting more information about the area's history. Is it in the beginning stages of development? Are investors buying up land on which to build (and opening new businesses)? Is much of the area farmland, which would likely indicate things would remain similar to what they are now?
You can also scan local news sources for upcoming announcements about any big companies coming into the area. In most cases, quality tenants are excited to see a major company opening in their city because it brings more jobs, resulting in workers moving there. In addition, a rental management company in the area will also have the inside scoop on the job market and provide you with more details.
Even after you find out what the job market is like in the property's area, there are other factors to consider. For example, a new business moving into town may cause housing prices to fluctuate, depending on the type of business involved. Sometimes property owners can capitalize on new rental properties when new businesses are preparing to move to the area. If you get the information early on, a property manager can help you purchase an investment property at a lower price, knowing the area will be hot in a year or so.
As you assess the job market, do so with an eye toward the future. If you plan on having a single-family home long-term, evaluate whether the job opportunities there will be practical in ten years. With the way people have turned to online shopping, many retailers are out of business, which is something to consider when investing in an area heavily populated with these businesses.
Evaluating the job market is a crucial element when selecting a new property with excellent ROI potential. If you purchase in an area with ample job opportunities, big corporations, and high-paying positions, be sure to advertise this when trying to rent the property. Let people know it is the perfect place to get ahead in life. Get help with all the details from a company that offers professional property management services in the area. Real Property Associates helps investors analyze properties and maximize returns!
Learn more about finding the ideal rental property when your download our free "Biography of the Perfect Investment."