Buying Your First Investment Property

Location of The Investment Property within Sierra Madre

When buying a home for personal use, the location is a significant factor to consider. The same is true when purchasing your first investment property. One important aspect to consider is how close you want to be to your rental property. Do you prefer it to be located nearby or in another state? There are many factors to consider when making this decision. Things such as your familiarity with the neighborhood, rental demand, weather conditions, etc.

When it comes to becoming a landlord for the first time, many people tend to choose an area that they are already familiar with. Often, this means selecting a location close to where they currently live, work, or grew up. There are several practical reasons for this approach.

First, it reduces uncertainty since you already have some knowledge about the area. Further, it’s easier to find resources like a handyman, hardware store, or a local real estate agent to assist you. Second, it’s easier to promote the quality of life in the area, including nearby schools, shops, and restaurants. That’s why we recommend investing in areas you are familiar with. For example, many of our clients invest in Sierra Madre due to the high rental demand and quality of life in the area. Check out maps on Realtor.com to get a feel for the City and its boundaries while browsing currently listed properties.

Consider Price

The price of the investment property is another crucial factor to consider. Filtering your search for properties based on the price is the next step in finding the perfect rental property. Price will help you narrow your search to specific neighborhoods in your desired location. For instance, if you’ve decided to purchase an investment property in Sierra Madre, you will need to determine your budget. Some areas in the city command higher rent than others. Analyze the factors that strongly influence price and adjust your criteria. Remember that the price you purchase the investment property for does affect your property taxes.

Even at this stage, the location of the rental property still plays a critical role. For instance, when selecting a rental property, it’s essential to consider whether tenants prefer to rent a home on a quiet street corner or near a busy street with easy access to shopping. The answer to this question will depend on both the location and price of the property. Therefore, it’s important to remember that location is still a relevant factor when considering the price of the rental property. In the next section, we will discuss the types of properties that are commonly used as rentals.

Type of Building

Several types of properties serve as rentals. Typically, first-time investors tend to purchase either houses or condos. While it’s possible to achieve success with any type of property, there are essential considerations to keep in mind for each property type.

Houses or Single-Family Homes (SFR)

Let’s start by discussing houses as rental properties. Houses are an excellent option for rentals because they don’t share walls with other properties, providing tenants with more privacy. Additionally, there are typically no specific rules or regulations that dictate owner and tenant conduct, giving you more flexibility as the owner. You can decide what amenities to offer to the tenant, such as whether to pay for maintenance costs or hold the tenant responsible. Many tenants prefer renting houses over condos or townhomes due to the privacy and space they provide, often prioritizing these factors over price and location. In summary, renting out a house provides more flexibility for you as the owner.

Condominiums/Townhomes (PUD, Track Home, etc.)

Now, let’s discuss condominiums and townhomes as rental properties. In this case, the owners typically own the “air space” inside the unit, which includes the interior walls, windows, and roofs. The Homeowners Association (HOA) usually owns and maintains exterior walls, roofs, and other common areas. This arrangement can be beneficial as common area maintenance issues are handled and paid for by the HOA. However, the HOA’s board may ultimately pass these costs on to the homeowners. So, be sure to review the HOA’s finances and ask questions about the HOA’s financial health. Other factors to consider with condos and townhomes include tenant complaints from adjoining neighbors, shared driveways, elevators, and decoration restrictions.

Multi-Family Buildings

Finally, there are multi-family residences, such as duplexes, triplexes, and apartment buildings, that can also be used as rental properties. However, it’s important to remember that price plays a significant role in this case. There are only a few areas in Sierra Madre that are zoned for multi-family homes, and these properties typically have a higher price tag. Examples of such areas include Sierra Madre Boulevard and Esperanza. As a first-time investor, you will also need to manage tenant complaints, repairs, and city ordinances, which can be more challenging with multiple units. It may be easier to focus on managing one tenant at a time in a single-family house or condo. In any case, it’s essential to hire a good Sierra Madre property manager to help you navigate these issues.

Conclusion

To sum up, when considering purchasing your first investment property, it’s crucial to take into account the location, price, and type of property. These factors should be evaluated separately and then as a whole to identify the best rental property. If you’re interested in purchasing your first investment property in Sierra Madre, please contact us for a free consultation. We would be happy to help you navigate the process and find the right investment property for your needs.[/vc_column_text][/vc_column][/vc_row]