Do you know the top Features of a Profitable Rental Property?
Are you planning to buy a residential rental property to boost your investment portfolio? Investing in properties is exciting and rewarding but if you make the right investment choice. Apart from income and rewards, real estate investment without expert advice can be awful for a first-time investor. Real estate is a competitive business that’s why it’s important to do a detailed study before you dive into this investment. There are some pros and cons of real estate investment. Let us check out the most considerable things while buying a property.
1) Neighborhood of the Property
The neighborhood of the property you are going to buy attracts and the vacancy rate of that area. Just think about buying residential property near a university! There are more chances of students becoming your tenants. You should always invest in the real estate property with a demanding neighborhood.
2) Property Taxes
Property taxes in different areas are different. But you need to be aware of how much money you will be losing in paying taxes. High property taxes are not a bad thing always. Besides that in a demanding neighborhood, the property attracts long-term tenants. You must also know that there are some unappealing locations that also have high taxes. You look at the tax information in the municipality’s assessment office.
Apart from that, you can also talk to homeowners in that community. Also, inquire that the property tax increases are probable in the near future. A city/locality in financial distress can hike the taxes far high what a landlord can realistically charge in rent.
3) Schools
The next important thing that you must consider is the quality of the local schools. You must focus on this factor if your property is a family-sized home. After all monthly cash flow is your main concern. So, if there are no good schools near your property, it can affect the value of your investment will be affected.
4) Crime
Nobody desires to live next door to a hot spot of criminal activity. Nobody. Hence the local police, law, and order of the locality where you are buying a property must be in a good state of execution. You must study the rates for vandalism and other crimes in that area. Always pay attention to the rate of criminal activities in that area. This factor is going to play a very significant role in your property investment later.
5) Job Opportunities
It is a fact that the locations with growing job opportunities attract more tenants. You can easily research this topic online. If big companies are moving to the area, it’s sure that workers in search of a place to live will flock there. It will cause property value to go up in that area.
6) Amenities
Always consider the proximity of parks, restaurants, gyms, movie theaters, public transportation links, and all the other perks that attract renters in that area. Facilities like City Hall nearby your property can add an unbelievable value to your property. It is true that in the areas far away from the amenities, the property prices will be lower but who will want to rent a house in this area? Think once!
7) Future Development
Go to the municipal planning department if you want to get information on developments or plans of a particular area. A lot of construction going in the area signifies a good growth area. Property investment in this kind of area is surely beneficial.
8) Study Average Rents
Rental income is like a bread-and-butter for your income. As you are buying the property for rental income, you must know the area’s average rent. Research the area well enough to gauge where it can take you in the next five years. If you can afford the location now but taxes are expected to increase, don’t invest there. It can make you bankrupt later.
9) Natural Disasters
Natural disasters affect property investment adversely. Never buy a property in an area that is prone to earthquakes or flooding.
KEY TAKEAWAYS
Examine the neighborhood thoroughly—including its livability and amenities.
A neighborhood with a higher vacancy rate is not a good place to invest.
Get a sense of the local market value of the property in the area where you are planning to invest.
Do research on the average rent in the neighborhood.
How to Start Your Search?
You can start the search for a property on your own. If then you find difficulties bring a professional into the picture. But you should understand the thing that finding that property for investment is going to take some skills and some shoe leather. Thorough research will help you narrow down several key characteristics you want for your property. Research more about the location, size, and amenities. After that, you may ask a real estate agent to help you complete the purchase. The potential property location options also depend on the factor of whether you intend to actively manage the property or hire somebody to do that for you. If you can actively manage it yourself, you might want a property near where you live. In the other case, proximity is not an issue.
