Use Roofstock to Grow Your Transitional Rental Portfolio

Posted by Hannah Lapin on Jul 8, 2020 9:00:00 AM

transitional rentals

Transitional rental investors are focused on flexibility and market conditions. They are more interested in spending the lowest amount possible upfront in order to have the highest amount of cash flow immediately. If you are a transitional 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 pull properties inline with the transitional rental strategy. Here is a quick guide on  how to find transitional rentals on Roofstock. 

Roofstock has a class of properties they refer to as “Cash Cow” properties which often fit the transitional rental bucket . These properties come at lower purchase price, with a higher cash return, and a larger rental pool.  When searching for these properties on Roofstock, look for:

  • Purchase Price: The purchase price of transitional rentals will vary based on location, however they will typically be under $200,000.
  • 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. Transitional rentals have neighborhood ratings of 1-2 stars. A 1-star neighborhood  is a low-income area with a low average school rating, and a 2-star neighborhood  is a lower-income neighborhood with generally older homes and slightly below average school districts.
  • Cap Rate: Cap rate is the yield on an investment property after all expenses, except the mortgage payment. For transitional rentals look for cap rates with a minimum of 8%. 

Keep in mind, purchase price, neighborhood rating, and cap rate are just a few filters to help you narrow down your Roofstock search for transitional 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 appetite. 

To start browsing properties, sign up for Roofstock for FREE. Also, learn more about how to customize Visio's loan products for a transitional rental property. For more investor tools and resources, visit our Resources Page

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Related: 3 Creative Ways to Sell a Tenant-Occupied Rental, Forbearance vs. Deferrals,  Rent Forbearance Programs- Develop a Plan

Topics: Real Estate Investor Tools