The Right Rental Property
If you are considering investing in a rental property, remember there are things that can boost your profit, but there also pitfalls that will subtract from your return. By doing some research on the right things to look for before buying, a first time investors can avoid making a costly decision.
First, look at the quality of area. The type of neighborhood will determine the type of tenant it will attract and affect how often you may face vacancies. Visit the area at different times of day and also check for vandalism and crimes rates.
Get all the property tax information from the assessment office. Remember that low property tax is not always a good thing. Talk with other homeowners in the area and make sure that high property tax is worth it.
Do a little research on the school district. Being in a high quality school zone can substantially add to the rental value and attract stable growing families. It will affect your resale value in the future and being in close proximity to the school grounds is also a good factor to consider.
Areas with new developing businesses and employment opportunities will definitely mean more tenants. But be cautious because having a possible huge corporation down the street might negatively affect house prices and rental values.
Search the area for surrounding amenities such as a community pool, parks, shopping mall, gyms, public transportation and any other perks that could attract a potential tenant. Also, see if there are any future developments that will boost the neighborhood values as well.
Check the 100-year flood plain information for the area and get insurance quotes before considering a property. Knowing the chances of flood or other natural disaster is very important. This will directly affect your insurance rates and ultimately your return.
Once you have looked at all these factors and determined the property is a good investment remember to account for other things that can affect your bottom line, like renovation, maintenance and listing costs. An investment property will most likely take time to produce cash flow. So when deciding to search for a rental property, always start with financial planning and budgeting.
And remember if you need any real estate investment advice or consulting, Venture Realty is here to help!
The Venture Realty Team