Last year, the average return on investment in the real estate sector was 10.6%! This ROI is much higher than the actual profit margins of most businesses, so putting your money into an investment property is a much quicker way to save and grow your wealth.
10.6% ROI, however, is only the national average. Choosing the right investment property and running it well could put you in line for even greater returns.
To do this in Vienna, VA, you'll need a few tips on how to game the local real estate market. Incorporate these three tips in your search and see great results.
1. Understand Local Trends and Landscape
Rental real estate in Vienna, VA, does incredibly well for property owners because the median rent in Vienna is more than $1,000 above the national median. To get that benefit, however, you need to look at where the property is located and whether the people most likely to rent will be willing to pay.
For these insights, take a deep look at nearby schools, local businesses, crime stats, and future developments. A skilled property manager can help you calculate the net value these factors will add or subtract from your ROI.
2. Consider Property Taxes
Vienna real estate is priced incredibly high compared to the rest of the real estate in Virginia (which is partially why the rents are high). High property values mean higher property taxes.
High property taxes aren't necessarily bad in the US because those taxes fund many local amenities. Those amenities, in turn, can make the neighborhood "more valuable." However, it is best to avoid this extra cost in units with high tenant turnover or areas with high income taxes.
Property tax and tax on rental income also add to your annual admin. Working with a property management firm can significantly reduce accounting efforts and costs in this regard.
3. The Fixer Upper Question
When buying investment properties, it can be difficult to perfectly balance the economics of purchasing a fixer-upper vs a place in pristine condition. Houses without faults fetch more of a premium on the market, but a place that needs more work costs more to bring up to a set standard.
At the very least, avoid anything that doesn't meet the legal habitability standard. From there, balance the costs of fixing potential places up against buying a perfectly maintained property. The option that comes out cheaper will give you a better ROI for renting out or flipping.
Find the Right Investment Property Today
An investment property is one of the best and safest stores of wealth you can have, but it's important to do a lot of research and thinking if you want to maximize rental income. Working with a property management company can give you the insights into the community that you need. It will also make understanding and working with property taxes much easier.
Whether you're looking to rent out or flip your property, PMI Smart Choice has you covered. Get access to nearly two decades' experience and let us find the perfect property for you.
