Do you want to buy and profit from a rental property? Let us take a look into the leading 7 things you must consider as you search for the proper rental property.
The neighborhood’s quality where you invest is going to influence both the kinds of tenants attracted and vacancy rate. For instance, if you purchase in a community that is close to a university, odds are that your potential tenant pool is going to be mostly comprised of students and that you’ll face vacancies on a pretty consistent basis (that is, during summer). Be alert to the fact that some municipalities try to discourage turning houses to rentals in some neighborhoods by imposing exorbitant permit charges and a variety of bureaucratic red tape.
Locations that have growing opportunities for employment usually attract more individuals – which means more tenants. To discover how certain area rates, go right to the United States Bureau of Labor Statistics or the local library. If you see an announcement for a major company moving to your locality, it’s possible to rest assured that people will flock to that area. But, this might cause property prices to react (either positively or negatively) depending upon the corporation that is moving in. The point here is that if you’d like the new company in your backyard, the renters likely will, as well.
If you are handling family-sized accommodations, you have to consider the quality of educational facilities in the area. If a home is good, yet the schools nearby are non-existent or poor, it may affect your investment’s value. Even though you’ll be mainly concerned with the month-to-month cash flow, the overall rental property value comes in to play as you ultimately sell it.
No one has the desire to live next to a hot spot for crime. Visit the police or public library for any accurate criminal activity statistics for a variety of neighborhoods, instead of asking the owner who’s hoping to sell the house to you. Things to be on the lookout for include serious crimes, vandalism rates, petty crimes, as well as recent activity (either down or up).
Check out the prospective community for projected or current malls, parks, movie theaters, gyms, public transport hubs and all of the additional perks which attract renters.
Number of Vacancies and Listings
If there’s an abnormally high amount of listings for one certain neighborhood, it may either be a sign of a seasonal cycle or community which has “gone bad.” Be certain that you discover what it is before buying it.
Rental income is going to be the bread-and-butter of the rental property; therefore, you must know what the average rent is in the area. If you charge the average rent, and it won’t be sufficient to cover your taxes, mortgage payment, and other costs, you must keep searching.
For more information on how to choose the perfect investment property contact Pyramis Company today. We have over 30 years of experience working with property management!