Single-family rental units fill numerous gaps in the Columbus housing market. Not only do they serve low-income families, they also meet the needs of residents who aren’t ready, can’t find, or can’t afford home ownership at this stage of their lives. Moreover, the appeal of a single-family home versus living in a large multi-unit apartment or other form of public housing can’t even be quantified for many residents.
Property investors looking to expand their portfolio to include scattered-site single-family rental properties should be aware of numerous important factors. Here are a few key things to keep in mind as you plan your investment strategy:
- Define Your Development Budget
While some scattered-site projects can be financed with tax credits, not all are. If you’re interested in acquiring single-family properties or building them new, accurately projecting your costs for development, leasing, and the ongoing operations and management of your property are essential to sustaining your investment, whether it’s funded with tax credits or otherwise.
In general, it’s recommended to budget for higher per-unit development and operating costs than you might expect, especially relative to costs associated with multi-family property expenses. Connect with a general contractor and other local development professionals early and often to gain an accurate understanding of current and projected costs.
- Partner With a Property Management Firm
Local property management companies are highly attuned to the current market. They know what units are renting for in a given area and are well-versed on local and state fair housing laws. Additionally, they have the soft and hard skills necessary to partner with you and your tenants as well as help you achieve your financial objectives.
For scattered sites in particular, it can be beneficial to hire a third-party management firm that specializes in scattered-site management (yes, they do exist) to handle your units not simply because it’s a lot of work, but also because it can be time-consuming to travel to units that may not all be in the same area of the city.
- Establish Project Goals Early
Prior to investment and development, you want to determine if you intend the property to be a long-term rental unit or if your goal is to eventually convert it to homeownership, as this will influence your overall investment strategy.
As you consider your options for scattered-site property management in the greater Columbus area, get in touch with us at RL Property Management for additional insight into this area of property investment.