Permanent rental investors are focused on the long-term investment picture. They want to hold onto their properties for the foreseeable future and are more interested in the long-term returns than the upfront costs. If you are a permanent rental investor looking to grow your portfolio, Roofstock, an online rental property marketplace, has hundreds of properties for you to browse and specific criteria you can search that match the permanent rental strategy.
Roofstock refers to permanent rental strategy properties as “Appreciation Aces.” These properties come at a premium for locality but with expected higher appreciation and rent growth. Here is a quick look at some of the filters you can use to search for permanent rentals on the Roofstock platform.
- Purchase Price: The purchase price will vary based on location, however they will typically be over $250,000.
- Neighborhood Rating: The Roofstock Neighborhood Rating is a proprietary algorithm that takes into account many investment criteria including school districts, home values, and employment rate. Permanent rentals have neighborhood ratings of 4-5 stars. A 5-star neighborhood is an affluent neighborhood with top schools, and a 4-star neighborhood is a medium- to high-income neighborhood with generally good schools.
- Cap Rate: Cap rate is the yield on an investment property after all expenses, except the mortgage payment. For permanent rentals, the cap rate is normally less than 6%, though rents are not static, so the cap rate will fluctuate with the market rents. It is important to note that lower cap rates are not necessarily bad, but often indicate a better location with a better chance of appreciation.
Keep in mind, purchase price, neighborhood rating, and cap rate are just a few filters to help you narrow down your Roofstock search for permanent rentals. These filters further should serve as guidelines and not as strict criteria. For each investment property, it is important to run the numbers to see how the actual property will fit your investment goals.
To start browsing properties, sign up for Roofstock for FREE. Also, learn more about how to customize Visio's loan products for a permanent rental property.
For more investor tools and resources, visit our Resources Page.