Looking for an excellent investment strategy? Consider purchasing a build to rent property in Chicago! Here are 4 things you should consider before breaking ground!
Investors all over the country are taking advantage of the popularity of the build to rent trend. While there is some risk, the reward can be huge. You can generate profits and equity right away. As long as you know the numbers, have accurate costs, and a feasible goal in mind, investing in build to rent opportunities is an excellent way to quickly add value to vacant land and secure an additional monthly income source. Below are some things you will want to think about before you invest in a build to rent opportunity in Chicago!
Choosing The Right Location
Just because you think it is a good neighborhood, doesn’t mean people are renting there. You need to ask yourself how easily you will be able to find tenants for the property. And not just any old tenant. Rather you need to be able to rent to high-quality, long-term tenants in order to see the greatest profits possible. On the other hand, you could be in a great neighborhood, with a number of vacant rentals sitting on the market. Make sure you find the right balance in order to make your build to rent property worth it. Ideally, you are looking for a growing area, with a good mix of renters and owner-occupied properties. Renters may appreciate being close to certain amenities such as restaurants, schools, or metropolitan centers. Keep this in mind when choosing where to locate your build to rent property in Chicago.
Choosing The Right Property Size
When building a house with the intention to rent it, you’ll want to determine the ideal size. Adding more bedrooms will help to increase the rental property’s value, but you’ll need to make sure there is a market for such properties. Who is renting in the area and how much space will they need? Single, young, professionals may not need as much space as a family of six. Analyze which properties are renting for the most per square foot and take it from there. You’ll want to make sure you are getting the most bang for your buck and not wasting your money building a home that will be too large to justify the cost.
What Will The Building Costs Be?
The cost of building one house can be very different than the costs of building another. Don’t assume you know what they will be as things can vary based on the location, size of the proposed property, and any features that are included with the property. You will need to have an estimate from a knowledgable builder, letting you know what you should expect. If your investment contract has builders lined up, don’t be afraid to ask questions before signing. Ask for recent references and information about past projects that they have completed. Make sure they know exactly what you are trying to achieve by constructing the house.
How Long Until The House Is Ready For Move-In?
If you are buying a build to rent property, you will need to know exactly when it will be available for move-in. The goal is to be able to generate income from the investment as quickly as possible. When you work with a team who specializes in build to rent opportunities in Chicago, you can rest assured that the house will be constructed quickly and with excellent craftsmanship. You won’t have to worry about faulty or rushed construction.
Finding The Right Tenants
The net step is to find the right tenants for the property. If you have chosen the right location and property type, you will have potential renters lining up to be able to rent a brand new home. Before you allow anyone to move in, complete a thorough background check, contact references, and make sure they will be able to afford the monthly rent. Ideally, you will want to find someone who will live in the house long-term, taking care of the property as you would. Make sure to clarify in the lease what you expect of the tenant and make sure your required security deposit will cover reasonable damages. You don’t want to build a new home only to have it be destroyed by the first tenants you have living there.
Investing in a build to rent property is an excellent way to build wealth through real estate. At Chicago Home Buyers, we can facilitate the entire process, ensuring you find the best land and work with the best available builders. We will be with you from start to finish to make sure you are getting exactly what you want in your Chicago build to rent property.