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Property Critieria

To choose an investment there are many criteria to choose between. Here are some of the ones we feel are most important to meet our Objectives for Quality Long Term Investments.

SFR CRITERIA:

  1. Neighborhood Class: A or B – new or really well taken care of neighborhoods where owners and tenants want to live.
  2. Property Class: A or B – condition and layout is good, will attract tenants and keep them longer.
  3. Low Relative Price – purchase price on lower end (relatively cheap) compared with similar properties and neighborhoods.
  4. High Relative Rents – rental income on the higher end when compared with similar properties and neighborhoods.
  5. Few to No Repairs – little or no initial repairs and deferred maintenance.
  6. Air and Roof Newer – not old so they don’t need to be replaced within a few years.
  7. Returns Right – income should be able to cover the expenses, future repairs, loan payments, and still have a bit left over.

2+ UNIT CRITERIA: (some basic variations from SFR Criteria)

  1. Neighborhood Class: A, B or C – long term rental neighborhoods for renters, not higher turn over or distressed neighborhoods.
  2. Property Class: A or B – condition and layout is good, will attract tenants and keep them longer. No bad layouts or features (very small bedrooms, very small lot sizes, etc.).
  3. Low Relative Price – purchase price on lower end (relatively cheap) compared with similar properties and neighborhoods. This takes into account items 3, 4, 5 above.
  4. High Relative Rents – rental income on the higher end when compared with similar properties and neighborhoods.
  5. Few to No Repairs – little or no initial repairs and deferred maintenance. (If there is should more than make up for the investment of additional capital.)
  6. Little Deferred Maintenance – carpet, paint, siding, etc. should be in condition to continue for years, or should be accounted into the price relative to other comparable investments.
  7. Air and Roof Newer – not old so they don’t need to be replaced within a few years. (If there is should more than make up for the investment of additional capital.)
  8. Returns Right – income should be able to cover the expenses, future repairs, loan payments, and still have a bit left over.

Check here for our Criteria for Choosing Market Areas.

Here are the Objectives we seek to obtain with these criteria – Investment Objectives.