Let me put it more convincingly. I am committed to buying SFRs for my own portfolio. Exclusively? Heck no! In fact, my policy is to offer any intended investment to my clients first. So far, my clients have picked my pocket clean, purchasing every investment grade property I could find. (Of course, the resultant commissions are some consolation.)n you decide to sell or move up through a §1031 exchange.

"But enough about 'when' and 'where', the profit-crazed speculator coyly asks, "are some properties better than others when buying a SFR for a rental?" Indeed. While there's a bear for every bowl of porridge, in order to give yourself the best chance to reap maximum rewards, some generally sought-after features should be kept in mind. While doing so, it is wise to remember that these features must be important to renters as well as to the eventual purchaser when you decide to sell or move up through a §1031 exchange.

The three most important rooms in a house are the kitchen, the master bedroom and the master bathroom. Kitchens should have all the "extras" which have become necessities: disposals, dishwashers, built-in stove, and refrigerators (more important to renters than to buyers). Microwaves are a bonus. Let there be light! Dark kitchens are dark ages.

The master bedroom should be noticeably larger than the other bedrooms. Privacy is sought-after. Master baths? There should be one. A house with a shared master bath or no master bath is an anchor which will drag rents and prices below their natural watermark. Its size and glamorous character will vary with the price of the house. A tub in the master bath is a plus.
Fireplaces are less important than a few years ago but still are desired. Apartment dwellers are less sensitive about covered parking. In a house a garage is important. A two car garage is anticipated in the type of rentals which will be a premium along The Corridor. Brick is a bonanza. Buy brick! Newer is better than older. Cared for is better than battered. Grass is better than gardens. Trees are better than almost anything else. Cul-de-sacs are a plus. Views are the gnats pajamas.

Of course, there are don'ts, too. Unless you're being compensated for it, don't buy a SFR which backs up to a parking lot (church,

shopping center, office complex or otherwise). Forget your parents advice to buy a corner lot. They're O.K., but don't pay a premium.

Don't buy a house on a street that has a line down its center. Don't buy across the street from a school. Don't buy a house because you would want to live there. Don't go eclectic, go normal.

"What about the size of the house, the price range, and the terms? What about the management concerns like pets, leases, and deposits. What about investment concerns like leverage, financing, and options? What about...?

Yes, there is a much more to discuss before you purchase and let me make one thing perfectly clear, I am not suggesting that we abandon duplexes, four-plexes, and apartments. I am merely stating that we now have another arrow in our investment quiver. The key to successful, long term investment is to keep your eye on secure returns, not on the investment vehicle.

Talking in generalities has its place, but when we examine your financial situation, your goals, your attitudes, and then analyze specific properties based upon your particular situation the best investment for you may be something quite different than what I would suggest to another person. As the song says, "One man's ceiling is another man's floor."

The moral of the story is this, this is the beginning of a sizzling investment cycle in one of the hottest markets in the nation.

This is the time.
This is the place. -

MIKE HESSE, CCIM, CPM
Real Estate & Investment Specialist
DIRECT - 720.581.2222
online at www.mikehesse.com
email mhesse@ccim.net