Our local office now has a residential property management division, and I couldn’t be happier about it. I frequently get calls from out-of-town investors who want to purchase a home here for investment purposes, and then rent it out. My forte is selling residences to people who want to live here, and interact in our community and perhaps put down roots. That’s not the investor’s goal.
But, because I like to be well-informed, I have learned a few things about the rental market in the Tri-Cities anyway.
- quantity of rental units in the Tri-Cities ranges from 38%-52%. Our property manager, Bryan Walsh, likes to be conservative, so he puts the numbers at closer to 45%
- vacancy rates are between 4%-7%, but again, Mr. Conservative likes to put the number at close to 7%
- most requested property is at least 1800 sq ft, 3 or 4 bedroom, 2+ baths, with a fenced yard
- rental rates for the house described above can vary between $1100 and $1300 a month. A newer home and that fenced yard are going to bring in a rent at a higher point of that range. For townhouses or smaller homes, $800-$1000 is an acceptable range.
- pet-friendly will increase the possible tenant base by a huge amount. At least 90% of renters prefer pet-friendly locales.
- don’t expect a huge cash flow every month. Most Tri-Cities rentals bring in only one or two hundred extra dollars monthly for the investor.
Interesting sidebar to the mortgage messes some people have found themselves in…more people than ever before are now used to living in a house. If someone is foreclosed upon, they’re not going to want to go to an apartment. They’re going to want a house again, even if they’re not owning it, it’s what they’re used to. So, an investor would be wise to purchase a home for rental purposes, as opposed to a condo or townhome.
Home prices are still really reasonable here, so it’s definitely a worthwhile place to invest, if the numbers make sense for you.