My advice would be to thoroughly research the local market and consider the demand for short-term rentals. Location is key, but you also need to account for regulatory changes, property management costs, and competition. For example, in a saturated market, investing in unique property features or targeting niche markets, like luxury stays or family-friendly rentals, could set you apart. Make sure your cash flow projections consider variable costs like property taxes, maintenance, and vacancy rates.
If you're looking for something that can give you recurring revenue, then multifamily is the best property to buy for investment purposes. In the right areas, the demand is always there, and there's always an option to make the properties more upscale to cater to renters from higher income brackets. As long as your occupancy rate is decent, there is no way to lose in multifamily, unless you're unfortunate enough to buy an apartment complex in a declining neighborhood. The only downside to buying multifamily is that there is nothing passive about it. Owning a multifamily is like running a business. One way or another, you're going to be involved in the day-to-day, even with the best property manager on your side. Those who pool their capital in syndications are the only true passive investors in the multifamily space, and you're not one of them if you're going to buy an apartment building. This is where hiring a property manager comes in handy. With a property manager, you can offload tasks like advertising, tenant screening, rent collection, maintenance and repair management, and handling evictions. Admittedly, these are things that you can do yourself as the landlord, and if you're particularly interested in retaining control over all aspects of property management, then you shouldn't be hiring a property management company at all. However, these simple things can become challenging if you're living some distance away from your properties, or your portfolio is spread out in a wide area. With a property manager, you're saving yourself the hassle of driving from one location to another to take care of things.
If you're considering investing in rental properties in the current market, my key advice is to thoroughly research local market conditions. Pay attention to trends in property values, rental demand, and economic factors in the area. Important considerations include the location's appeal, the condition of potential properties to avoid unexpected repair costs, and ensuring positive cash flow by calculating expected rental income against expenses. Additionally, be aware of local laws regarding rentals and have a clear long-term strategy in mind. By considering these factors, you can make a more informed and strategic investment decision.