If you’ve got real estate on the brain, either as a homebuyer or investor, you know what it’s like to fantasize about that property with an alluring “for sale” sign. You might be the type to browse Zillow, dreaming of the perfect home…or the ideal investment.

But scoring the ideal investment property isn’t just about aesthetics. It’s not even just about a good neighborhood. So many factors converge to make a property a good investment (or not!). We’ve chosen ideal investment properties across the South and Midwest for over 20 years. It’s safe to say we know what to look for!

And we’ll help you know what to look for, too.

In the simplest terms, the best single-family rentals (SFRs) attract long-term residents, generate steady cash flow, and appreciate over time. Period. But how do you make sure that happens?

Here’s what we look for!

6 Key Criteria When Selecting SFR Properties

#1 – Location

• Strong Job Market – Look for areas with a diverse economy and stable or growing employment opportunities. The job market drives population growth and motivates people to put down roots.
• Good School Districts – Families prioritize good schools. If you score a great school district, families with kids (who tend to stay longer) will come knocking.
• Access to Amenities – Proximity to shopping centers, parks, restaurants, and entertainment increases desirability. Most people don’t want to drive 15 minutes or more to get to the essentials, like grocery shopping!
• Commuter-Friendly – Access to highways, public transportation, or major employment hubs is a plus. The fewer daily frustrations your residents have, the more likely they are to renew.
• Population Growth – Areas with steady or increasing population growth tend to have stronger rental demand.

Further Reading: The Underlooked Criteria for an Ideal Investment Market

#2 – Property Type & Layout

• 3-Bedroom, 2-Bath Minimum – The sweet spot for demand, especially for families. Smaller or larger properties may be more difficult, either in terms of finding renters or maintenance demands.
• Single-Story Homes (Preferred for Certain Markets) – These are easier to maintain and more appealing to aging renters. Of course, single-story homes are much more common (the standard) in our markets than in other parts of the country.
• Functional Floor Plan – Open layouts with a well-distributed living space are more attractive. Avoid “quirky” layouts that may be difficult to work with. You might like them personally, but rental properties are about broad appeal and minimizing frustration.
• Garage & Storage Space – A two-car garage and ample storage make the property more desirable. Consider the added space of closets, built-ins, attics, etc.
• Fenced Yard – Great for families with kids. Again, families with kids are more likely to renew their leases as they want to provide stability.

#3 – Size & Square Footage

• 1,200–2,000 Sq. Ft. – Ideal size range; larger homes often have higher maintenance and utility costs, while smaller homes risk residents regularly outgrowing the space.
• Lot Size Matters – Larger lots can add value, especially in suburban areas. Not only are they attractive for recreation, but they add privacy. However, avoid going too large. Maintaining large lawns/acreage is costly and time-consuming.

#4 – Property Condition & Age

• Newer Homes (or Well-Maintained Older Homes) – Avoid excessive expenditures on significant repairs by targeting well-maintained or new properties. “Fixer-uppers” might make good TV, but they’re not ideal for SFR investors.
• Roof, HVAC, Plumbing & Electrical in Good Shape – These are expensive to replace; verify their lifespan so you’re not hit with a considerable cost right out of the gate.
• Low Maintenance Features – Simple landscaping, durable flooring (like LVP instead of carpet), and modern, easy-to-clean finishes reduce ongoing costs. These are considerations for both the property as-is or reno work.

#5 – HOA Considerations

• Minimal or No HOA Fees – High HOA fees can eat into cash flow. If you buy in a neighborhood with an HOA, scrutinize what those fees cover and if they add actual value to you and the property.
• Flexible Rental Policies – Some HOAs limit the number of rental properties in the community, so verify restrictions before purchasing.

#6 – Resident-Friendly Features

• Washer & Dryer Hookups – No one wants to go back and forth to a laundromat long-term. Either provide a washer and dryer or the appropriate hookups. Convenience is retention!
• Energy Efficiency – Lower utility costs make the home more attractive for everyone. Your residents will pay less, and so will you during vacant periods.
• Updated Kitchen & Bathrooms – These are high-impact areas for overall appeal. Think clean, bright, and functional.

Don’t want to worry about identifying and assessing properties yourself? Good news – you don’t have to! Call today, and your REI Nation advisor will guide you through the turnkey SFR process.

Our Portfolio Advisors at REI Nation make investing in real estate stress-free. Tap the button below to start!