Investing in real estate can be a wise financial decision for anyone. However, historically, the world of real estate investment has been largely dominated by men. Women, on the other hand, have been underrepresented, despite our growing financial independence. I will share with you my story of investing in the Northwest Arkansas market over the last 5 years.
Investing was always something I wanted to do. Growing up, my family owned many investment properties, so I had an idea about how it worked. After leaving the corporate sales industry in 2018, I pursued my real estate license. The year 2018 was a great time to get my real estate license because since then, NWA has grown and continues to grow. A year into helping homeowners and investors buy properties, I bought my first investment property with the help of an out of state business partner who wanted a piece of the pie in the growth of our area.
When looking for an investment property, there are a couple of things my husband and I look at—the first being a balance between the debt coverage ratio and the amount of cash to be put down to maintain that debt cover ratio. Location and the marketability of the property are other main items I look at before buying. Location is a key piece when determining the amount of rent to charge a tenant. The rent needs to cover the maintenance of the home plus some. The age of the home and condition is important to us as well. We invest in nicer properties that are easier to maintain as we take care of our own property management.
In 2020, we purchased our second investment property. This was a new construction home in West Fayetteville. West Fayetteville is an area we are drawn to, as it appeals to upperclassmen college students as well as business professionals, because of its proximity to I-49. This particular neighborhood also provided amenities to the tenant such as a community pool and dog park. Once advertised for lease, it was rented a day later. The success continued, so guess what? We bought a third one.
In 2021, we purchased an older home located on an acre lot. The home needed some work to make it rentable, which was not normally what we wanted to do. The difference on this property was the size of the lot. We were looking at the future of this acreage and what we could do. The plan is to rezone the property and subdivide to be able to develop one day. We ended up remodeling the home on this piece of land to be able to get the rent we needed.
In 2022, we wanted to purchase a short-term rental, as we kept hearing how lucrative they are. The popularity of Airbnb properties in this area seemed to be in high demand as well. What we quickly learned is that STRs are not for us. They require more upfront cost to get them furnished, they demand more work as you are cleaning on a regular basis, and there was no consistency in income. We have since turned that property into a long-term rental. Again, as soon as it was listed for lease, it rented within a day.
We have had a 100% occupancy rate since starting with our first property in 2019. What I atribute to our success are the things mentioned earlier: finding a property that covers the debt coverage ratio, location, and marketability of the property to get the rent you need. We also maintain our properties to a high standard and include all lawn maintenance, as this keeps the curb appeal of the home marketable for future tenants.
If you are a current investor or looking to buy your first investment property, Northwest Arkansas is a great area to do it. Educate yourself on the process, build a relationship with a lender, and understand the market trends. Real estate can provide greater control over the investment process and allow you to make decisions based on your own financial goals and objectives. We hope to continue buying to build out our portfolio in this area.