The Features of a Profitable Rental Property
The decision to invest in real estate is only the first and the smallest step of a long process. Looking for an income property is hard but there are a few features to consider which will help you make the best choice.
Even if you are using the services of a real estate agent, start researching on your own first. The agent can pressure you to buy before you have found exactly what you are looking for. Do things with your own pace and find the place which will bring you the most profit. Bear in mind that your income will be affected by whether you hire someone to manage the property and the rental process or you are going to be the landlord yourself. If you don't want to pay someone else to do the management, then make sure the property you buy is not too far from your home. The next thing to consider is the neighborhood - the quality will attract different kinds of tenants. If you choose a property near a university most of your tenants will be students, who tend to go home in summer. This does not secure a stable, long-term rental income. You need to consider that an excellent property in a good area will have higher taxes. A good idea is to choose an area which is close to the business centre, has a park and good schools. The quality of the schools will also influence your potential renters' decision. A location with good employment rate is very attractive too. Look for an area which is not a crime spot. Families want safety and every plus in the neighborhood means a plus to your property too.
Check online for any planned future developments in the area. People enjoy having as many amenities close by as possible, but construction sites and noise put off renters. Choose a property which is not in risk of being surrounded by high buildings and losing its green spaces.
Research the average rent in the chosen area - is it enough to cover your property taxes, management expenses and mortgage? If the answer is not yes - keep looking. Buying property for income has to bring enough profit, not risk of future bankruptcy. Your rental home will also need insurance in case of natural disasters, so make sure it won't eat away your income.
Before making a decision talk to home owners and tenants in the area - inquire about any particular cases in the area. Renters are even more honest than owners, so you can learn about the negative aspects of the area. The best investment you can make is a single-family property or condominium. Single-family homes attract families and couples who are considered long-term tenants. Two adults or families are more financially stable than single people or students. Look for a property which will be compatible with this type of people. Once you find the property, make sure you do all the necessary renovations and repairs - the property has to look its best for viewings. This will also raise the property's price for a future selling.
Be ready to deal with any issues your tenants may have and future repairs. This is a part of a landlord's responsibilities. If you want to make good profit choose your tenants wisely and try to keep them. They need to fall in love with your property and make it their home.
There are many properties which are good investment, but the right one is a combination of a good neighborhood, great structure and a skillful landlord.