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The Floor Plan: When Buying Rental Property Should You Care About It?

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IMG_0812It was a deal killer. I knew it as soon as I walked through the front door.

On paper, the charming single-family house in West Allis met our location and purchase price requirements. The remodeling
needed was significant, but certainly not costly enough to scare us away.

Unfortunately, there was virtually no living space and no way to expand what little there was inside the home.

When we’re buying rental property in Milwaukee there are many considerations, location and purchase price being the most important. However, another key factor is floor plan (click here to read more about why location and floor are important to cash flow investors).

IMG_0823Floor plans that lack functionality, feel closed off or are just plain odd can create serious problems for buy and hold investors. Today’s highly qualified, sophisticated renter may not be able to consciously tell that a floor plan isn’t functional, but they can certainly feel it. That’s why prospective tenants almost always want to see the property first before they sign a lease.

Think about it for a moment. Rental advertisements usually have pictures (click here to learn why using high quality photos for rental listings is so important), list the property’s size, all of its features, include bedroom/bathroom counts and details about the neighborhood.

So why would the renter want to see the property? Why would you or I?

The answer is to get a specific idea of how the home is laid out. The prospective tenant wants to know if the family room is open enough to fit their sectional and big screen TV. They need to know if the bedroom is large enough for their queen size bed set and dresser. And is the bathroom centrally located for all family members and guests?

If the floor plan doesn’t fit the tenant’s lifestyle then the property will be almost impossible to lease. Worse, when the day finally comes to liquidate the home will be very difficult to sell to another investor or retail homebuyer.

So when buying rental property how do you know if the floor plan is functional?

Ask someone that would know to walk through the house with you. It could be a Realtor, someone with young children or an experienced investor. If you can’t find anybody then think about how you’d live in the home with all your stuff.

Chances are you’ll know very quickly, like I did, whether the layout feels right or not.

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