Investing in real estate can be a frightening task for a first-time buyer. While the rewards can be huge, there are also a number of risks that you will need to consider. However, if you know what to look for, you can find some excellent rental properties on the market in your area.
Research has shown that the following four factors are among the most important to consider when searching for a rental property:
1. Neighborhood:
Making sure that the home is in the right neighborhood can be one of the main determining factors of a rental property’s profitability. Your neighborhood quality will determine if people want to move into your home and how much they will be willing to pay. As such, before purchasing any rental properties it is always vital to do a full analysis of the surrounding area. Don’t just search for data online either – you can always go knock on doors to find out what the neighbors think.
2. Property Tax:
Taxes imposed on properties are ever-changing. Because of this, you will need to do some research on local tax regulations before making any purchases. High taxes are not necessarily a bad thing, and low taxes are not necessarily a good thing. You will just need to ensure that, in either case, you will be able to charge enough in rent to cover the cost of the tax as well as your other expenses.
3. Amenities:
A good selection of nearby amenities can be a huge draw to potential tenants. This could include nearby parks, malls, public transport, a hospital, gym and theaters. Put simply, the more amenities that you can provide easy access to, the more you will be able to charge in rent – increasing your potential profitability.
4. Upcoming Infrastructure Development:
When purchasing the rental property, it is always important to consider the future as well as the present. While you may only be able to charge $1,000 in rent each month right now, you may be able to charge more once significant infrastructure improvements have been completed. This could mean the completion of a new park, highway, or business center (to name just a few).
Just about every little corner of the world will have good areas, neighborhoods, and homes. With some research and a bit of patience, you could soon be the proud owner of a great rental property in one of these locations. If so, you might just find that it can be a very profitable endeavor.