Building an investment property in Central Oregon is a great way to generate a monthly revenue stream while taking advantage of the region’s low-vacancy housing market. It’s also a good way to throw money down the drain if you haven’t first ensured that you’re ready to pay the hidden costs tied to this investment, picked the right neighborhood for the house that you plan to build, and made sure people of all ages will find something that they like in its design.
At Arbor Builders, we are happy to sit down and talk about building an investment property and your plans to use the new home as a full-time rental or something that you will sell after a certain period of time. Contact our agents today so you can learn more about the home-building process and ways that you can earn money investing in new construction.
Know your budget
One of the first things to know when building an investment property is that many financial programs cater only to owner-occupied homes. You should also share your plans with your construction loan broker to avoid paying any penalties and fees hidden in the fine print.
Don’t forget that you’ll be a landlord once the investment property is finished. While you can hire a property management company to handle the day-to-day with your tenants, you should be ready to replace a kitchen appliance, hire a mold remediation specialist to clean the bathroom ceiling, and fix a frozen pipe before it sprays water all over your living room floor.
You can absorb some of these costs when you set the monthly rent for your investment property. But you can only collect this rent when you have renters, which is why it’s important to make sure you build an investment home that fits its location.
Find the right location
When building an investment property, you should consider where to put it. A home’s location can’t be upgraded or repaired. It also impacts the home’s value, its pool of potential tenants, and the overall return on your investment.
For starters, you’ll want to make sure your investment property is near or at least within a short drive to Central Oregon Community College or OSU-Cascades if you plan to rent it to students. Millennials will want a place that’s close to downtown, and families with children will want a space that’s in a good school zone.
Pay attention to the neighborhood’s amenities: Is it near a park? Are there sidewalks or bike lanes, what’s the traffic like? Would this be a fun place to drive through in the snow?, etc. These factors and others will impact a potential tenant’s overall quality of life. Find out what the city plans for the area’s future so you aren’t surprised when these things change.
Finally, try to match the investment property’s exterior with the other homes in its neighborhood. While a circular, blue door might make it easy for delivery drivers to spot your property, it might also deter potential tenants or buyers who don’t want their house to stick out like a sore thumb.
Design for everybody
Have you ever visited a home that had a nook for a wall-mounted telephone or a big hole in the wall that held a tube television? Bad design touches, like a staircase that keeps someone with a stroller from entering the front door, can be just as annoying as outdated ones. Both can scare away potential tenants or buyers and sink the investment that you’ve made with a home.
That’s why you should keep keep these basic design rules in mind:
Make it accessible. The same wide hallways and approachable entrances that make it possible for older renters to get around on a walker or a wheelchair are bonuses for parents with strollers and those who like to carry multiple bags of groceries.
Keep it open. Everybody’s got a seven-foot couch, a 12-person table, or some other extra-large piece of furniture that they’d like to keep in their house. Keeping your living areas open lets prospective tenants arrange their furniture the way that they want. It also makes your investment property a more comfortable and accessible space to live.
Let the light come in. Not all of Bend’s “300 days of sunshine” hit at a time when you’d like to be outside. Having large windows that let the natural light inside your investment property is a feature that tenants of all ages want and is a good way to cut heating costs.
Consider a home office. People who work remotely or would like to will want their next house to have a sealed-off area where they can do their work. People who don’t work remotely can use the “home office” that you’ve included in your investment property as a sewing room, a guest bedroom, or a place to keep their kayaks, bikes, and skis.
One of the nicest things about building an investment property is your ability to incorporate all these features in its design. Call one of the agents at Arbor Builders today so you can learn more about the home-building process and other ways to get the biggest return on your investment.
Advice from an award-winning home builder
This article is part of a series of blog posts that we at Arbor Builders are putting together to walk you through the home-building process. We are an award-winning home builder and would like to use this opportunity to highlight our recent accomplishments at the Central Oregon Builders Associations 2021 Tour of Homes.
In addition to receiving the Best in Show prize for homes in the $325,000 to $350,000 price category, our Canyon Rim Village model home won the awards for:
Best Architectural Design
Best Feature (fireplace)
Best Interior Finish
Best Master Suite
You can view the full list of Tour of Homes award recipients by clicking here. Don’t forget to call one of our agents today so you can learn more about these award-winning features and how you could feature them in your next home.