Approximately 90 percent of millionaires made their fortune with real estate, so it’s no surprise that an increasing number of people are deciding to invest in a rental property purchase.
Even though rental properties can make you a lot of income over the years, purchasing one is a big decision with some financial risk. So before you dive in, you’ll need to learn some rental property buying tips.
In this post, we’ll teach you what to look for when buying a rental property, so keep reading!
Location, Location, Location
Undoubtedly, one of the most important factors when purchasing an investment property is the location. You’ll want a rental property in a safe neighborhood that’s popular with families. So, research the following factors in advance:
- Crime statistics
- Public transportation
- School districts
- Local amenities
Choosing a sought-after neighborhood will ensure you can rent out your property easily and likely for a competitive price. So, it’s worth it to work with real estate agents, such as Skender-Newton Realty, who know which neighborhoods are the most popular among renters.
Rent Prices
If you are trying to decide between two houses of comparable prices in different neighborhoods, comparing local rent prices and vacancies can help you choose the best investment. Why?
Well, for starters, you will have to compete with other vacant rental homes. So looking at what others charge will tell you how much you can ask for when renting your property and whether it will be enough income to make a return on your investment.
So, before you purchase a home, check out rental statistics, such as the average rent price and how many rentals are available.
Fixer-Uppers vs. Ready-to-Rent Homes
Most often, the cheapest homes on the market need a considerable amount of work done before they are habitable. And, as a landlord, you’ll have a legal obligation to fix all pertinent issues before renting it out. So, you’ll need to decide if you are willing to make that kind of investment.
Thus, most first-time landlords choose a property that is ready to rent at the time of sale so they can start getting a return on their investment sooner than later.
Local Property Taxes
Typically, homes in better school districts and neighborhoods with many public amenities come with higher property taxes. So, if you plan to purchase a home in a desirable location, don’t forget to factor your property taxes into your rent price. Failure to do so will cause all those taxes to come out of your pocket!
Now You Know What to Look for When Buying a Rental Property!
After reading this post, you know the basics of what to look for when buying a rental property. But, of course, buying a rental property is a huge decision, so be sure to make a careful budget and do plenty of research on local laws. If you do, you’ll make a success of your rental property purchase!
Would you like to learn more tips on how to buy a rental property? If so, check out more of our real-estate content!