Buying or even thinking about buying a rental/investment property brings up a lot of questions: What area should I buy in? What rental price range should I go for? Who is the best renter to rent to? Hopefully, the following article will help to answer some of these questions.
What Properties Should I Consider?
While this is a personal decision, I want to share some pros and cons I have observed in this area. I am not at all making a character judgment about any of the groups listed below. These are simply my observations made as a result of experiences in working with all of the groups.
White Collar Properties;
Better defined as high end properties, can attract very good renters. These renters have typically owned expensive homes and as a rule will take very good care of your property.
On the other hand, my experience is that the high end renter can have a very entitled mentality and can be “challenging” to work with. Things like requesting and scheduling maintenance, seemingly pretty simple things can become very challenging with these Tenants.
Another aspect of the high end Tenant is that if you don’t meet their expectations, they do have the resources to come after you legally.
The white collar renter will typically have more financial resources and are executives or self employed. You will find them to be fairly well insulated from an economic downturn.
Gray Collar Properties:
These are properties in the middle of the economic spectrum, usually rented by the gray collar worker.
What is a gray collar worker? It is typically a middle management person; the manager of the local electronics, or grocery store.
This renter is generally conscientious and will take good care of your property. They are typically regular people and most all adults in the home are working full time. They are generally easier to work with than the white color renter when it comes to requesting or scheduling maintenance work.
Gray collar renters possess moderate financial resources and will be somewhat insulated from an economic downturn.
Blue Collar Properties:
This renter is at the lower end of the economic spectrum.
Typically, working in the trades, construction worker, car mechanic or truck driver. Generally, all adults living in the property work full time.
They are regular people and are generally easier to work with than the white color renter when it comes to requesting or scheduling maintenance work. They possess more limited financial resources and are typically the first tier to be affected from an economic downturn.
These are gross generalizations of people groups and of course there will be many exceptions to the comments made above.
Also, try to remember, that we are all very different people and each of us is better suited to deal with a particular people group than perhaps, another. If you seem to get along best with people in the “white collar” segment then you need to consider that seriously. You always want to play to your strengths.
Pat Larkin, together with his wife Kris, owned and operated one of the largest residential property management firms in Orange County, California. Additionally, he has been successfully building, developing and managing properties for over 30 years.
After selling their property management business in 2009, Pat and his wife founded and developed “Manage To Make Money” which is a resource for property managers providing Books, Documents and Forms, Live Seminars, E-Books, Free Webinars, Tips and Private Consulting. Visit their website at: www.ManageToMakeMoney.com