Does renovating houses scare you? There’s also an opportunity to invest in houses that are already renovated and ready to rent.
We love to buy, renovate, and rent out houses. The advantage is that immediately, as soon as renovations are finished, the home’s value goes up over the value of the investment in building and renovation together. But sometimes, we encounter a promising opportunity also in houses that are ready to rent out (turnkey) that are hard to resist. Let’s look at Bristol, as an example:
About a month ago, I started combing through the newly reawakening town of Bristol, on the northeastern border of Philadelphia, a picturesque town on the Delaware River. As part of the field research I conduct, I talk to store owners, peek into houses that are being renovated and get updates from contractors and neighbors about market conditions. The news about the revitalization of Bristol hasn’t reached many people outside of the town yet. The major real-estate investment players are just now starting to discover it all over again.
Bristol’s historic image can be problematic. For years, it’s been thought of as a strict town, with high crime rates, a failing education system, and hot-headed Irish immigrants. Today, walking through the town’s picturesque streets and looking at the impressive developments—restaurants, trendy cafés, a marina being built on the river’s edge, it’s hard to connect all this to the negative image that has dogged the town over the years. The town recently won the nationwide Small Business Revolution contest, earning itself a “Main Street Makeover.” It’s located only 30 minutes from the center of Philadelphia, across a bridge from New Jersey, and situated on major transportation arteries.
If there’s one thing I really hate, it’s getting mad at myself for opportunities I’ve missed that I knew about and didn’t follow up on.
There are two common denominators when it comes to great real-estate investments: location and time. To grab properties in the right place, in markets that are reawakening, there’s a narrow window of opportunity. According to all the macro-level data, and the cross-referencing we’ve done with other markets, Bristol represents a unique window of opportunity, as of 2017. Rental prices are climbing quickly and housing prices are poised to leap upward. A waitress in the King George Inn, the oldest inn in the United States (since 1680), which is located in Bristol, told us that she had been forced to move to another nearby town because Bristol had become too expensive for her. The gap in time between housing prices going up and presents an unprecedented window of opportunity. The main challenge is finding houses for sale. Patient owners who have spotted the trend are sitting on their properties as if it were Brooklyn in the 1990s. Therefore, our strategy at the moment is one of aggressive search and acquisition of anything that moves. There’s no room for hesitation. Property that’s already renovated, un-renovated—in the big picture, it won’t matter much when the property doubles its value within two or three years, and immediately starts returning impressive yields that are only going to grow by leaps and bounds.
Does rehabbing scare you? Then use your cash to get great deals on turnkey rental homes!
We love the Buy - Rehab - Rent model -- it offers immediate appreciation and great monthly returns.
But sometimes I come upon a turnkey property that’s impossible to resist. Last week, I went combing the streets of Bristol, talking to shop owners, peeking inside rehabs and grilling contractors for local gossip. The funny thing is, if you talk to people who don’t live there, they have no clue what you are talking about. “Restaurants? Waterfront? Marina? Not in Bristol!” Ok, so some people know, but for whatever reason, Bristol is fast becoming the best kept secret in the Philly area. The town has a vibe and recently won the nationwide Small Business Revolution Contest, making us confident that it’s set to take off. Don’t be the person who, four years from now, after prices have doubled, wishes they had bought on the ground floor. And the bonus? Rents are skyrocketing–even as you read this. Homes that sell for under $100,000 are getting $1,300 in monthly rent. Great ROI, and only one block from the waterfront!