What Makes The Best Rental Home in the Sacramento Valley Area?

If you’re an investor looking for an opportunity to buy a rental property, what should you be looking for in the Sacramento Valley area? 

Today, we’re sharing some of the characteristics that make the best rental investment property.

Affordable Rental Values for Sacramento

First, you want a property that will be affordable. In the Sacramento region, the median salary is just over $72,000 per year. This breaks down to $6,000 a month in income. Our applicants must earn three times the rental amount, so you’re looking for a property that will earn an average of $2,000 per month in rent. 

This isn’t to say there aren’t plenty of people earning more than that. But, they’re usually more concerned about their finances. They don’t want to be rent-poor. They may be saving to buy their own home. So, look for a property that will rent in the $2,000 per month range. You’ll find it’s the most rentable range.

Three Bedroom/Two Bathroom Sweet Spot

The best rental property to buy in Sacramento is a three bedroom, two bathroom single-family home. This is the most sought-after rental home. It has to be in good condition, too. Most of the renters looking for these properties are leaving the multi-family life and they want more space and privacy. They’re looking for a home that’s clean and move-in ready. They want the extra bathroom and a secure garage. They want outdoor space and they like the extra bedroom because they’re working from home now. 

Sacramento Rental Property Location

One thing the rental market and the sales market has in common is location.

This is a big part of the picture when you’re looking for the best investment property. You want to buy a house in a neighborhood that looks safe. By safe, we mean that when you look down the street you don’t see bars on the windows and chain link fences around the perimeter of each property. Those things will make tenants not want to rent your home. 

Ask yourself these questions:

• Would you feel comfortable having a child play in the front yard unattended?
• Would you move into this house yourself?
• Does it look like a friendly neighborhood? 

You want an environment that’s comfortable and attractive to tenants. 

This is a good example of why flips don’t always do well. You can renovate a distressed property into a gorgeous home inside and out, but if that home is on a street no one wants to live on, you’re going to have it vacant and you won’t earn back what you’ve invested. 

Offering a Well-Maintained Rental Property

No one wants to rent the Taj Mahal. It may seem like a novelty at first to rent out a six-bedroom home with a pool and marble floors, but the rent will be so high that your tenants, if you find them, will not stay long. Higher rents lead to higher turnover.

There are a lot of property owners thinking about 1031 exchanges. You’re better off buying two smaller houses when you do a 1031 exchange than one giant mansion. 

Finally, find a Sacramento-based Realtor who knows the local market. We can refer you to professionals who specialize in the investment experience. 

If you have any questions about investing in Sacramento rental homes, please contact us at Sacramento Delta Property Management.