7 Tips to Keep in Mind When Searching for a Rental Property
Are you planning to buy and profit from a rental property?
From your first thought of becoming a landlord to actually purchasing a rental property, the idea may have seemed a bit daunting, especially if you are a first time investor.
If you have ever been involved in a real estate investment, you know that it is a tough business. The field is open and peppered with numerous land mines capable of obliterating your investment. To help you with that, here are the things to look for when searching for a profitable rental property.
Always choose a quality neighborhood. This will influence the vacancy rate and the tenants you choose. For instance, if the neighborhood of your property is close to a university, your potential tenants’ pool will mainly comprise of students. You are also more likely to face vacancies on regular basis because of this.
Consider property taxes in your chosen area as they are not the same across the area. This will directly affect how much money you make from rent. However, high property taxes are not an issue if you can get long-term tenants and high rent. With that, also consider any probable property tax hikes in the future.
Look for local educational facilities if you are planning to buy family sized property. The value of your investment can be affected if the nearby educational institute is of poor quality or nonexistent.
Would you prefer a rental property next to a hot spot for criminal activities? To get complete criminal activities statistics for different neighborhoods, go to the public library or police instead of asking the property owner. You must get all the statistics related to serious crimes, vandalism rates, recent activity or petty crimes.
Job market is another significant factor to consider. If the area has growing employment opportunities you are likely to attract more tenants. For instance, if any major company is moving in that area, workers or your future tenants are likely to flock to the area. However, this might affect the house prices both positively or negatively.
New Planned Development
Visit the municipal planning department and take information on potential new developments that have been zoned or expected in the area. A good growing area is the one that has many business parks, apartment buildings and malls going up. With that, look out for development projects that might remove the activity-friendly green space or become competitive with your rental property.
Last but not the least, do consider the rental income. It is the bread-and-butter of the rental property. You must be aware of the average rent in the area. Maybe the charged rent is not enough to cover expenses such as taxes and your mortgage payment. In other words, if the area is affordable now but significant developments are in store or property taxes will increase, then a property that is affordable today may turn into a lose later.