When investing in rental properties, it’s important to understand what effect the age of a house (or, ‘year built’) will have on your return on investment, or ROI.
We looked at homes that rented between $800-$2000 throughout the entire year of 2013, in the following counties: Barrow, Cherokee, Cobb, DeKalb, Douglas, Forsyth, Fulton, Gwinnett, Hall, Henry, & Walton.
Looking at the graph, it’s clear that homes built before 1990 take much longer, on average, to rent. (48 days on market, compared to 44 for homes built after 1990)
It’s also clear that the age of a home has a direct relationship with the market rent. All else being equal, newer houses = MORE rent.
But, that’s not the entire story. What’s not represented in this graph is the cost of maintenance. Older homes tend to have more maintenance issues than newer homes, which means that owners of older homes are often operating ‘in the red.’ Buying a newer home is a good way to take that P&L statement from ‘red’ to ‘black’.
So, when you’re shopping for a new investment home, consider more than just the price of the house. Consider the age; it can make a world of difference.