How do you determine the best use of a property?

Question

I am looking for my first buy and hold and have been trying to decide if I want to do single family, multi family, vacation rental or some other short term rental like Airbnb.   What is the best way or the best place to research to determine the best use for a property?  Appreciate the feedback!

Christine Lee · Answer

Yep.  Thanks!

Alex Capozzolo · Answer

@Christine Cordell Both. See if you can find an agent who invests him/herself! They can pull direct reports from the MLS to give you the demand data you are seeking. Investors will be able to give you insight on that too to a degree, and can verify how good off-market deals are too (which is a great way to find cashflowing properties and have instant equity upon purchase). You're 100%, take everything you hear with a small grain of salt, since everyone will share different experiences, and are coming from different backgrounds, strategies, and ulitimately different end goals. When you begin networking with investors/agents, try to find ones that are doing exactly what you are planning on doing !

Also, linking up with a solid property manager can also give you some good insight on demand for rentals! Hope this helps

Christine Lee · Answer

Thank you @Alex Capozzolo.  Is an agent the best place to start or local investors?  Surely there is some research sites out there somewhere right?  The advice I hear over and over is trust but verify when it comes to numbers.  Ok, got it.  That must be true on the research side as well.  The dilemma is that you can ask two people the same question and get totally opposite answers. I need to get past that somehow so that I can make my own decisions.....  Thanks for your help!

Alex Capozzolo · Answer

@Christine Cordell Loaded questions, but good ones ! Multifamilies usually have more potential to appreciate, so if that is part of your strategy it may be a good route ! However, it largely depends on your market. Vacation rentals can be fun and profitable; Airbnb continues to be a useful way for investors to squeeze extra cashflow from their rentals.

I would find out what the demand is for your market (SFH, Multis, Vacation Homes). See what renters prefer, so you can determine solid occupancy rates. Also, if you plan to hold for a while and sell later for hopefully a profit, see what types of homes are selling the most, and try to narrow down a few hot zip codes. This will give you more confidence in selling it later on ! Reach out to some investors in your market and gauge what is working for them ! Good luck!