Property investment is a competitive market in many areas around America, and Chattanooga, Tennessee, is no different. The area has seen a recent boost in property sales, with many investors looking to plow their money into real estate by acquiring rental homes.
As with any other investment, you undoubtedly want to maximize your property investment in Chattanooga. Here are some valuable ideas:
Work with property managers
Being a landlord can become an unmitigated nightmare if you attempt to go it alone. It might sound tempting because you save some money. But trusted property managers in Chattanooga such as Evernest and First Property Management can make being a rental property owner much less stressful and more profitable.
Property managers ensure that tenants are vetted and pay their rent, and the property is repaired and maintained. These functions are performed at a fee, which depends on which company you elect to use. This is a more profitable option as you are more likely to get tenants who will pay their rent on time, not leaving you out of pocket because they cannot get their rent money together.
Regular property inspections allow agents to identify minor issues before they become significant, thereby reducing repairs and maintenance expenditure.
If you are looking for a rental home to buy in Tennessee, Chattanooga should certainly be number one on your list. The city has an average rental growth figure of 7%, which compares favorably with Nashville’s -2%. The entire state is showing great responsiveness to the recent economic slowdown, slated to emerge from the recession far sooner than others.
Chattanooga has a strong startup sector that continues to thrive, contributing to the city’s job creation statistics. While unemployment rose to a record 15% while the COVID-19 pandemic raged, it is predicted to halve by the end of this year, bringing Tennessee closer to the record 3.3% unemployment rate it had in March 2020. Property management giants like JLL and Cushman and Wakefield predict that landlords will be flooded by applications from tenants seeking rental property accommodation as Tennessee’s economy continues to recover.
When choosing a suitable rental home investment in Chattanooga, as it is in any city, location is critical. Look at comparative property value increases year-on-year to determine which neighborhoods or suburbs show the most significant growth.
Real estate and property management companies can provide insight into this matter, especially those operating in the local sphere, such as Chattanooga Property Management and Greyhaven Realty Management Co. Their agents have a combination of an intricate network of connections and relevant local knowledge that gives them a distinct advantage.
As nearly half of Chattanooga’s homes are rental properties, landlords will never have problems finding tenants. However, most experienced rental property owners advise that new investors focus on middle-class suburbs as this is where families tend to settle into long-term rental contracts. Chattanooga investors would be well-served to look for rental properties in Audubon, Avondale, and East Brainerd.
Many investors worry that their mortgage payment will exceed the amount of rent they can charge for a property. In the days of higher interest rates, this would have been a problem. However, the FED has dropped interest rates to record lows, making mortgage repayments cheaper than in recent years.
Lower mortgage repayment amounts do not mean that you must charge less rent. Instead, they line your pocket with extra rental income as you continue charging the same rate, increasing it annually according to market trends.
As a hub that draws new residents seeking better employment, healthcare, and education opportunities, Chattanooga’s outlook is positive. Provided this is the case, property in the area will continue appreciating.
This makes the buy-and-hold approach one that could produce the best profits for property owners. The buy and hold approach suggests that you invest immediately, rent your property out as you repay its mortgage, and sell it much later on since property prices in that area have appreciated.
Upon buying a rental property, you should do some renovations and improvements right away as they will cost more in a few years time. Additionally, improvements like a renovated kitchen or refitted bathroom allow you to charge higher rent, meaning that they pay for themselves in the long term.