Thinking about buying investment property? All styles are good ideas these days, but over the next few posts I’m going to focus on single family homes. They are the hottest properties for tenants because of the lack of availability. To start out, I’m picking a few areas to feature because 1) they are good rental areas and 2) to show house sizes, amenities and agreed upon monthly rental prices. I’m going to do Lakewood first (I will be covering both the west and east sides of town).
There were many, many rentals in Lakewood during 2012 but I’m only dealing with single family homes. Still, there were 26 ! The average rental price for these homes was $1200 but they ran the gamut in pricing.
All 26 had at least 1100 sq. ft. of living space, some quite a bit more. There could be reasons to buy a home with less space, but in general, I would definitely stay above 1,000 sq. ft if purchasing investment property.
Let’s go over some details:
There were two 2BR homes (one east lakewood, one central lakewood) one rented for $650 a month, one rented for $750/month. Both had dishwashers and updated kitchens, one had central air, one did not. Both (judging from photos) had mechanical updates, clean, move in and ready to go.
There was a completely updated 1915 built row house on Cranford rented for $890.month. It had 1200 sq ft, no garage.
Most of the single family homes in Lakewood rented for more than $1,000/month.
1. How much sq. footage for receiving $1000 a month as a landlord? No set rule!
2. No set rule either on whether or not the tenant or landlord agreed to pay water and sewer.
3. All 26 homes were rented either at 100% of asking rental price or close to it. Actually, one of the higher priced homes (over $2k a month rent) rented for a few hundred dollars more than asking rental price.
Which brings me to another point: There is frequently competition among tenants. If you have a place that is in a sought after area, amenities tenants are seeking, you could get more than you were looking for per month.
The average number of days these 26 homes were listed for rent before getting rented was 29 days. Good, yes? One home which was also listed for sale and was in the over 2k a month category took over 200 days. One home took 51 days. With 29 days the average time, there were seven homes that rented in 7 days or less.
While most had central air, not all did. My suggestion, if you are purchasing and thinking about what to do in your renovations to get and keep tenants: a/c is great, if you don’t want to put out that expense right away, provide newer high efficiency window units.
80% of these homes had updated kitchens (even more modest homes seemed to have very nicely upgraded kitchens. And if the kitchen was older? It was still either large or in excellent shape with good storage. One thing almost everyone who rented a single family home in Lakewood last year got for their monthly rent was a dishwasher.
More to come, and I will feature Cleveland Heights next (fairly comparable in many ways to Lakewood, but we will see if there were more or less single family homes rented in Cleve. Heights in 2012 than Lakewood. Stay tuned!