What Is the Most Profitable Type of Rental Property?

However, how profitable a rental property can be is the question.

Today, we’re going to cover the types of rental properties that yield the highest ROI to help you in your search for your next investment. Let’s get started!

Determining Profitability for Real Estate Investments

Last month, you learned how to calculate the most important numbers in investment real estate. To recap, it is important to yield at least a minimum 1% return of the total purchase property. For example, if you purchase a property for $100,000, you would want to bring in at least $1,000 in rental income.

How do you determine which property can get that level of return? In our many years of experience in the Portland real estate sector, we have found that what truly makes a rental property profitable comes down to two things: the best-managed asset and a

strong location.

Property Management

Duplexes, 1-2 or 3-bedroom free-standing homes, condos, or townhomes can all have a strong return on investment. However, the right management is the real differentiator.

Property management companies, such as Evergreen Property Management, can take care of everything – from accounting, marketing, and tenant screening to tenant management and maintenance. That frees you up to focus on other things, such as acquiring new rental properties, knowing that your rentals are in good hands.

We also offer a 24/7 owner portal access so that you can stay in the know at all times with your property. The process is extremely streamlined. We deposit your rental income right into your account for easy access.

The bottom line is: professional guidance will increase ROI. Take exterior painting, for example. An industry professional can tell you if painting the exterior is structurally necessary to prevent damage or a value-add that will increase property value. They may also loop you in on color palettes that increase curb appeal and decrease time on market during a vacancy.

Your CPA can advise you on how to best take advantage of write-off expenses. For instance, will you be able to write off a large maintenance expense in one tax year or over several years?

Property management is similar. We advise you on how to maximize the ROI from your rental property. 

We also offer a convenient online portal for tenants to pay, schedule maintenance, and much more. Everyone wins at Evergreen!

Location

Strong locations are in close proximity to transportation, services (hospitals, parks, libraries, grocery stores, coffee shops, etc.), and entertainment / things to do. They also offer natural beauty.

While your cash flow varies based on the property, it is no secret that rentals near amenities and in scenic areas tend to provide a higher ROI, as well as attract more potential tenants, allowing you to charge more for your property.

One thing you’ll find is that long-term tenants look for housing near essential services, like schools and hospitals. Short-term tenants tend to go after housing near transit and entertainment options.

Conclusion

If you want to make the most from your rental property, there are many things to consider. However, what you don’t want to ignore is finding the right location and property management. At Evergreen Property Management, we are proud to be a trusted local property manager in Portland that aims to maximize profits for property owners like yourself and give you a superior experience from day one.

Want to work together? Contact Evergreen Property Management today! We’re here for you.