So you’re looking to invest in rental property. Congratulations! Becoming a landlord and rental property owner is a big step, and one that can be very rewarding and lucrative. Before you make the leap, there are a number of very important factors to consider when selecting the property you’d like to purchase. Here are the things we suggest considering before making your decision.
Check the Neighborhood
Different types of neighborhoods offer different sorts of pros and cons. Are you investing in a popular area, which will be expensive up front but potentially beneficial in the long run? Are you looking at up and coming areas, or low income housing? We’ve written on the benefits and pitfalls of neighborhoods before and we encourage you to read up.
Access to Transportation
Renters will need access to transportation, whether it’s their own car, a bus, a train, or something else. You should consider whether you’ll be able to provide ample and affordable parking, or easy access to public transit. This will be a big draw for potential renters.
Whether you’re targeting older folks, families, or young professionals, you’re going to need to pay attention to the nearby amenities. Will your tenants need a Laundromat, or a nearby grocery store, or nightlife? Being close to entertainment and necessary services can be a big draw.
Check Current Rentals in The Area
Are there a lot of vacancies or are units always rented out? This is important to know. You don’t want to buy in an area that can’t keep its units filled — there’s a reason for that.
This is especially important if you’re renting to families with children, or who are planning to have children. Being in a good school district can bring in a large pool of these types of renters who are looking to stay long term.
Property Taxes and Repairs
It’s absolutely necessary to get someone knowledgeable to let you know how much you can expect to pay in taxes. A building that needs updating or repairs can also be a big expense up front. Make a good choice for your budget and plan out the first few years’ expenses.
Permitting and Development Laws
Do you want to renovate or expand a property? Better check the local laws first to be sure you’ll even be allowed to do all the work you’re planning. Consider the cost of permits and legal work.
These are a handful of factors you should really consider before purchasing a rental property. Once you’ve made your choice, it’s a good idea to protect your investment by screening your perspective tenants. If you’re looking to keep your costs down, our RentalConnect program offers property owners and landlords a great alternative to full tenant screening. This service requires no on-site visit, sign-up, or membership fees, making it extra convenient. The $29.95 service fee is paid by the applicant. Available 24/7, RentalConnect is fast, easy, secure, and delivers reports needed to make an informed decision, including a credit report, a national criminal search, and a national eviction search. Reach out to us for more details!
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