Buying an investment property is a risk. Sometimes risk is a must to reach success though. There are many things you need to consider before you get out that check book. Here we offer you some important tips as you begin your journey into investment properties:
Location – Location – Location!
This needs to be your very first consideration – location. Not only will the right location determine how fast you lease the property, but the quality of prospective tenants too.
How is the competition?
Research the area online and look for rental listings in the area. If there are numerous ads, this may not be a good area. Or it could be a seasonal area such as beach property.
What conveniences are close by?
It is important that your potential tenants have conveniences to grocery stores, gas stations, churches and parks.
What is the crime level?
A quick stop by the local police station or reading the local news paper for police blotters can tell you a lot about a neighborhood. Tenants want to know they are safe.
Size does matter:
When you start your search for an investment property, remember to keep potential tenants in mind. A good average size is 3 bedrooms and 2 baths. Avoid properties that have 4 or 5 bedrooms and only 1 bath.
Family friendly is a must:
Chances are that your prospective tenants will be a family. Choose a property that is in a good school district and in walking distance is even better.
How old is the house?
You should look for properties that are no older than 20 to 25 years old. Anything older may not be up to code and have more maintenance problems than you want to handle.
What else can you expect to pay for?
We all know the taxman will be a part of this purchase. There is no standard rate for taxes. Check with the city, the county and ask about HOA fees.
Protect your investment:
There are two things that you must do to protect your investment. Accidents happen so make sure you have insurance. The next important thing is ask for rental history of all potential tenants. Then check those references out!
Above all, you want to make sure what you can afford and if this is the rental that will make you a profitable deal. By following these tips you will have a positive experience in your first