What to Look for in a Rental Property
Interested in investing in a rental property? If so, there are some things you want to consider beforehand. As with any investment, you want to do your homework and be sure you are making a smart decision.
Here’s what to look for in a rental property:
This seems obvious, yet many overlook this point. The main purpose in investing in a rental property is to profit from it. Do your research and find a property that will fit your budget and generate some form of profit. Be sure the rent per month is at least 1% of the purchase price of the rental purchase!
When it comes to investing in rental property, you must consider the location! Location can’t be stressed enough. People are willing to spend more on rentals that are located in safe neighborhoods, have great school districts, work is available and offers lots of amenities.
People want to be proud of where they live and comfortable. When the neighborhood is in demand, rent is higher. You can use online resources to identify which neighborhoods are suitable for your purpose.
No Major Issues/Renovations
When looking at rental properties, you want to avoid major damage and repairs (unless you own a construction company). Why? Well, renovations cost money! Remember, your goal is to make money, not lose money.
Even if you are able to get the property at a lesser price due to the damage, keep in mind the cost for renovations will most likely be more than what you anticipated. Also, you have to factor in the time and energy needed to renovate the home. That’s money you could have made finding a tenant and collecting rent on a turnkey rental property.
Consider a rental property that will require low maintenance of the exterior/landscaping of the home. Purchase a rental property that has a solid exterior, such as brick instead of siding if possible.
A rental property is an investment that can be profitable if done the right way. Try to always look ahead and see the bigger picture. This way, you will be able to maximize on your investment!