Huntsville is a hot spot for real estate investment. When buying investment property in any rental market, there are several tips that you ought to adhere to.
The Potential in Huntsville
Huntsville was seeing an increase in jobs, which had a positive impact on the housing market. Huntsville is on the right track, with an annual job growth rate of 3.9 percent.
Unemployment levels are down to single digits. In addition, there is the implementation of development projects such as the Facebook Data Center and the Mazda Toyota USA Manufacturing facility.
The increase in population has resulted in an increase in demand for rental housing. The supply of housing is unable to keep up with the demand. Developers haven't been able to handle the influx for housing in Huntsville. Investors are enjoying growth in rental prices as well as appreciation in property value.
With the Alabama A&M and The University of Alabama in close proximity, investors can choose to diversify their property investment. The steady stream of students year round can serve to reduce the risk and limit vacancy.
Some of the neighborhoods that you can invest in include Bailey Estates, Bon Air Estates, and Belmont-Redstone, the Ridge Summerfield-Phillips Creek and Wrightland-Jacobs Cove.
Here are the top tips that Huntsville’s prospective investors should adhere to when buying investment property in the area.
Tip #1: Due-diligence
There is no substitute for performing research in an area. Property is a multi-faceted industry, affected by several factors in any market. You need to identify the key drivers in the area or region and ensure the longevity of these key drivers.
We appreciate and acknowledge that not every potential property investor has the expertise to understand property jargon.
You will need an experienced professional to help you navigate the waters. Contact the APM Leasing & Management for sound and professional advice that will guide you on your journey.
Tip #2: Diversity the Risk
Do you remember the phrase ‘Don’t put all your eggs in one basket’? While you might want to invest in the same type of property, you could be setting yourself up for failure. We advise that you diversify your portfolio and balance out the risk.
The city of Huntsville provides a great market to diversify your risk. You can choose to invest in a traditional, multi-rental property, and lease out space to professionals in the city. Your second investment could be in student housing, thanks to the steady stream of university students in the area.
Should one market perform poorly, you are able to balance out the losses.
Tip #3: Invest in Renter-Ready Property
As the name suggests, a renter-ready property is one that can a tenant can move in immediately or on a day’s notice. They are free of any defects and are in great condition. Renter-ready properties generally have less maintenance costs.
To help you close on the best property possible, consider the services of a home inspector. This is a trained and licensed professional with the expertise to detect possible defects to the structure, foundation and systems of the property.
A home inspection report will also help you bargain. If there are any defects, you can make the seller aware and drive down the price. Alternatively, you can prioritize sellers who have already performed a home inspection on their property.
Tip #4: A Property Manager for your Rental Operations
Securing a rental investment property is just the tip of the iceberg. Once you have successfully advertised and secured clients, you need to properly manage the maintenance of the rentals.
There is also the assurance of compliance with laws, both local and federal. This can be stressful, confusing, or financially draining if you find yourself on the wrong side of the law. Here at Advantage Property Managment, we have the expertise to help make owning an investment property as easy as possible.
Tip #5: Budget
While you are purchasing a property, you still have other financial obligations to meet. It is recommended that you prepare a budget that will guide your property investment.
There are additional costs that come with being the next Huntsville landlord. You might be required to perform renovations to the property or meet closing costs to the sale agreement.
Bottom Line
While all these elements play a critical role in your ultimate decision to invest in Huntsville’s rental market there is one aspect that often overlooked: partnering with the right property management firm. APM Leasing & Management has been assisting property owners for more than a decade!
We provide one-of-a-kind services and packages to ensure that we meet each client's specific requirements. You can relax knowing that no matter how big your investment portfolio is, we will be able to help you handle it!