There are so many amazing investors to learn from but one that I admire the most agreed to share her tips on why knowing your tenant profile, should be one of the most important things you keep in mind before buying that investment property.
For instance, when she goes property shopping into a specific market, she always has her tenant profile in mind before looking at investment properties. Specifically, she likes having young families with children so she will look for properties near great schools and with 3 bedrooms and 1 ½ or 2 bathrooms; or she might like to attract a single mom and her children and thus will look for a home that either has two units (upper and lower unit) or a house that can be converted easily and legally to two units (upper and lower) or two side by side semi’s. Again, in this instance she would look for a property near the best schools and nearby shopping areas, as it will be highly attractive to families with children and for ease and convenience in their busy lives.
Initially she did not have a tenant profile and she suffered for it as her first tenant was a hoarder, never paid the rent and upon eviction left 70 kg of garbage in her garage and living room – suffice it to say she learned from that mistake!
She also shared that having a house with a separate basement or duplex allows her to market to both types of tenant profiles – young families and single parent families.
The benefits of splitting an existing property into two units also allows her to increase cash flow as she can now rent two units out separately – the upper floor of course will rent out for more.
It does not make sense to look for a property without having a tenant profile in mind, as you might look for a property that you think will attract any and all types of renters but you have not bothered to keep in mind that families need good schools for their children; or want shopping areas nearby for convenience or want parks and recreation areas nearby to enjoy family time.
All of these things matter.
I remember shopping for our first rental property – I was terrified! I thought of everything but the tenant profile and it literally came back to bite me in the ass!
Do you have a checklist of important items to keep in mind when shopping for your first or next property? If not reach out to me and I will send you my list – it may make the difference in getting a bad tenant vs a great tenant!