With real estate growing more expensive, and markets even outside of known hotspots becoming more competitive, investors have to be a bit more creative when it comes to looking for opportunities in real estate. This is one of the reasons that urban markets are alluring for Dayton property investors. You can do more inside of the city with your money, and you’ll find you’re able to earn more over the long term.
Let’s take a look at how we make this work at ManCo Property Services and why working with professional help is more necessary than ever, whether you’re an experienced investor or a new investor approaching the market for the first time.
Moving Into Urban Investment Markets
Keeping an investment portfolio that’s diversified is always an excellent way to manage risk and increase profits. One good way to diversify a portfolio is by moving into urban markets. If you’re looking for ways to enter the Dayton real estate market without a lot of capital, we’d also recommend you consider urban neighborhoods. Here’s how we advise investors to approach what’s possible.
Your initial thought might be to buy a property in a suburban area of Dayton that’s going to bring in rents that are around $2,500. To find such an investment, you can expect to spend from $270,000 to $300,000 on that property. Maybe even more.
Instead, you can identify a rental property in an urban neighborhood that costs around $125,000. Rents are likely to be at around $1,800. It does not take a lot of advanced math to figure out which is the better deal both for short-term rental income and long-term returns.
The investment is a good one. We can bring the same stability that investors think they’re getting when they buy a property in a suburban market. We carefully screen our tenants, ensuring we are renting those properties to reliable residents who are going to follow the lease terms and be able to afford rent.
One of the perceived barriers for investors and landlords in urban neighborhoods is that they think they won’t find a good tenant. It’s easier to find that well-qualified resident than you think. Especially if you’re working with our team at ManCo. We are focused on screening tenants thoroughly and objectively, and for looking for those long-term residents who we can count on for lease renewals.
Why It Works: Urban Dayton Real Estate Investing
Investing in urban real estate markets like those that are easily found in Dayton offers a multitude of advantages that can help strengthen your investment strategy and sustain your financial future. Let’s break down why urban real estate should be something you’re considering as an investor interested in Dayton’s rental market.
- Steady Appreciation
Urban areas are typically characterized by higher population densities and economic activities, leading to increased demand for housing and commercial spaces. Over time, this demand fosters steady property appreciation, offering consistent, long-term growth. You will spend less money on your acquisition than you would in other areas, and the appreciation and equity you’re able to build will be impressive.
- High Rental Income Potential
One of the primary reasons investors are taking more of an interest in urban real estate is the potential for high rental yields. While the rents might seem to trend lower in urban centers than in suburban neighborhoods, think about your rental yields over time. These areas often have a substantial population of renters, including new populations of tenants who prefer the convenience and amenities city living offers.
- Diversified Investment Portfolio
Around here, we are always talking about the importance of diversifying a portfolio in order to keep it resistant to risk. Investing in urban real estate allows you to diversify your investment portfolio. This is the best way to continue investing in Dayton while still diversifying. Whether you’re interested in residential, commercial, or mixed-use properties, urban markets provide a wide array of options. This diversity helps mitigate risk and can lead to increased returns.
- Economic Resilience
Historically, urban areas have shown remarkable economic resilience. Cities often recover more quickly from economic downturns due to their diversified economies and robust infrastructure. This resilience helps safeguard your investments against economic shocks. There is always going to be activity in urban centers and there’s always going to be a need for housing.
- Access to Amenities and Infrastructure
Urban properties benefit from proximity to essential amenities such as schools, hospitals, transportation hubs, and cultural attractions. These amenities not only attract tenants but also contribute to the overall value and desirability of your investment property.
- Opportunities for Value-Add Investments
In urban markets, there’s an array of property types for investors. Buy a single-family home or a duplex or a small apartment building. In neighborhoods within Dayton’s urban core, you’ll also often find value-add opportunities for investors willing to renovate or repurpose existing properties. By enhancing the property’s appeal and functionality, you can significantly increase its value and rental income potential. Modest investments will reap major rewards.
Building Strong Relationships with Urban Communities
Make sure you’re making smart investments. When investing in urban real estate, it’s essential to establish yourself within the community. Be a source of good energy. We have found that by building positive relationships with the communities where we invest, success is much easier to find. Engaging with local stakeholders and understanding community needs can lead to more sustainable and successful investments. Some of these urban areas have very high needs. It’s important to be sensitive to that.
You have to have the right partner when it comes to investing in the urban neighborhoods found within the Dayton real estate market. You need a real estate agent and a Dayton property manager who is well-versed in urban markets and the best way to succeed there.
We’re that expert. From helping you identify profitable urban properties to screening tenants thoroughly, we’re the partner you need.
Let’s talk about your investment goals. Contact us at ManCo Property Services. And remember: If it’s a property managed by ManCo, life just got better!