Are you interested in purchasing a rental property? It can be a great investment. But you need to be careful about who your tenant will be.
Think seriously about who you want as a tenant. Many tenants you find will be young kids just starting in life. Many will be people who will be life long renters. Others are people in financial difficulty who have had to sell their home and cannot buy another one at this time.
But then there’s my favorite segment of the rental market. Senior citizens. Many seniors have decided it’s time to sell the old home, and they don’t want the responsibility of having to take care of a home anymore. They’re tired, they just want to relax and enjoy life. In my opinion, this is the best segment of the rental market to target.
Here’s how I look at it. Senior citizens, when they move into a rental, tend to stay there for a long time. This means you don’t have to go find a new tenant every year. Finding a new tender entails that you get a new certificate of occupancy, you’ll probably have to paint the unit and you’ll have to pay the Realtor another commission to find a new tenant. And it will probably also be vacant for a period of one, two maybe even three months. This can make it not quite so appealing as an investment.
But since senior citizens tend to stay, they’re a good tenant. Senior citizens also tend to pay their bills. Which is more than I can say for many of the young kids just starting out. They also take better care of the unit.
When I was working as a contractor, I had to go clean a rental unit out after the tenant left to get ready for the next tenant. The exiting tenant had young children. I actually had to paint the ceiling in the living room because there were footprints on it. Why were there footprints on the ceiling? Because they could.
So in my opinion if you’re going to be a landlord, purchase a home in an adult community. Now for the bad news. Many adult communities are putting limits on the amount of units which are available for rental in a community. Others are putting on restrictions where you would need to own the property for a certain period before you can make it a rental. Sometimes this period Is one year and in other communities it’s two years. But if you can find a good rental unit in adult community, this can be a very good investment.
Give me a call to discuss.