When considering adding an investment property to your portfolio it’s a good idea to think about what types of renters different types of properties will attract, as well as what the demand might be. You don’t want to box yourself into one particular type of tenant, or a property that has low or seasonal demand. Check out this video where I sit down with Property Manager Patrick Shillington to get some expert advice.
Here is the Transcript:
BRENDAN – Hey there this is Brendan Stoneman with RE/MAX Kelowna and I’m sitting here with Property Manager, Patrick Shillinton with RE/MAX Management Solutions. Part of what property investors look at is, “If I buy this as an investment property, what’s the rental market gonna be like. ?”. Are there certain types of properties that we’re seeing a bit of a shortage of, or a demand for single family homes as opposed to condos?
PATRICK – As far as a demand, the time of year is going to play a part. Something where there’s a shortage of is reasonable priced, single-family dwellings. There just seems to be so many families that are out there trying to find a nice home to move into to stay long term. Families aren’t going to invest a lot of money and effort into moving if they can only stay there shorter term. So you’re typically going to attract longer term tenants. Typically these families can’t necessarily afford to purchase and buy their own home in the markets. Town houses are a great alternative because they can accommodate single individuals, couples, young families, retirees, etc. With condo apartments, there certainly is a lot more development happening, potentially flooding the market with all of these units becoming available, which will certainly even out the price points as far as what you can get for those types of units.
BRENDAN – For sure. I know there are several hundred units that are currently under construction for condos. In talking to some of my investor clients, I recommend that we maybe stay away from anything that might compete with that, because there’s gonna be a whole influx of supply coming soon.
PATRICK – Yeah exactly. And then as far as different types of properties, you can have a full single family home, or a house with upstairs and downstairs suites, or like I said, town houses, duplexes – something that’s gonna give a little bit more space, is a nice property to have vs. pigeonholing yourself into just studio units where you can only have one individual. And as far as the length and time for that tenancy it may be shorter term.
BRENDAN – And the other thing I’m always mindful of with my investor clients is, it’s one thing when the market’s crazy and everything rents, it’s when it slows down, or some more rental properties come on the market and the vacancy rate isn’t .05%, it’s one or two percent. You still want to have a desirable property, even in a down market.
PATRICK – Exactly, and that’s the thing with having a house. You’ve got a family that’s living there, they’re not about to uproot themselves, they’ve got kids in school, they want to stay long term, make it feel like home and be a comfortable environment.
BRENDAN – Okay now what about furnished rentals? Is there much of a demand for furnished rentals?
PATRICK – Furnished and unfurnished, you don’t necessarily get any more as far as rents is concerned. It’s more the type of applicants that you’re gonna attract, and length of time of the tenancy. Furnished typically are going to be people that are in transit. Realistically you’re not gonna have someone stay beyond a year. They’re either relocating to Kelowna, and they’re here on a contract position. It might be somebody that sold their home, and they’re in between, not sure, waiting to find a place to buy. Maybe they’re going to be building a home. Vs. somebody that’s going to be renting an unfurnished property. For them to move all their belongings in, get settled, typically they want to stay long term. They’ll want to look after, maintain it as if it’s their own. So it all depends on the type of individuals you’re looking for, and the length of tenancies, typically, that you’re going to attract.
BRENDAN – And then what about the higher-end properties?
PATRICK – It’s not a huge market for higher-end executive homes. Again, you might have people that are used to that sort of lifestyle that are relocating to Kelowna. They want to ensure that they’re in a comfortable environment like what they’re used to, but they’re typically wanting to stay homeowners, so they’ll be building a property, or looking at buying another home in the area.
BRENDAN – So maybe a little shorter term?
PATRICK – Yeah, not a huge demand as far as executive homes go, but there are people out there that look for them. There’s always a right fit for the properties, just the amount of demand for higher end homes is gonna be less than those for entry-level, single-family homes.
Contact Patrick for all your Property Management needs:
250-448-2637 ext. 202