Investing in real estate is always an excellent option, especially with today’s unimpressive stock market performance. Whether this will be your first rental property or your tenth, the process of finding a good rental property can be quite a daunting task.
When shopping for income properties, there are some basic features to consider with each and every option.
• Property taxes exist in every state and need to be planned for accordingly. To generate income from a rental property, you must be aware of your property tax requirements. The town office will have tax history information on a property.
• Future developments for the area are going to directly affect the success of your long term rental property plans. Check with your municipal planning department to determine future development plans for the area. A solid growth area will yield excellent rental property investment returns.
• If there are a high number of rental listings in the area and most are vacant, you may be looking at a rental investment property dead zone. If vacancies seem to fluctuate or are seasonal, then you will want to be sure that you can cover the costs of maintaining the property during the off-season.
• Check the monthly rent amount of other rental properties in the area. Even if your property is nicer, it is unlikely to rent if it is drastically more than other rentals in the area. Minimally, the amount you charge for rent will need to cover your mortgage payment, taxes and other expenses. You will also need to consider if the area has planned growth that property taxes will increase in the future and the amount you charge for rent will as well.
• It is of the greatest importance to understand your target tenants and choose your neighborhood and style of rental investment property accordingly. If you want to attract tenants with children you will want a property with a nice yard and in the good school district. Use the available amenities to determine who you want to rent to and if it is the right investment property to buy for renting.
• Two other rates to consider when reviewing the potential of your rental investment property are the employment rate and the crime rate. Your future tenants are going to consider both before calling you and you should do the same before you invest your money in a property where jobs are scarce or crime is a problem.
• Talk to other renters in the area. No one will give you more of the truth about the area than other renters living there. Homeowners are generally more “in love” with where they live.
• Single family homes will generally attract more long-term renters. Often times these renters are more financially stable and therefore pay their rent on time and keep their utilities up to date.
Finding the best rental properties in any city can take a lot of footwork. You may be tempted to work with a real estate agent, especially if you are new to rental property investing, but often time’s agents make buyers feel pressured to make a purchase and when you are getting into real estate investment, it is important to take your time and consider your purchase thoroughly. A better option is to work with a network of real estate investors or join a cash home buyer list. These networks allow their members complete discretion over their purchases, no commissions are involved and the properties are generally available at well below market value.