When you take your first step towards investing in real estate property, you have to put your heart and soul into it and do a lot of homework.
For a first time investor,
this task may seem to be quiet unnerving, but the search has to begin. It is a tough business to find and own a property in a place peppered with possible land mines waiting to destroy your prospects for any returns.
Here, we’ll take a look at the top 5 things that you must consider, when shopping for a profitable rental property-
Begin Your Search
When you set out to find a rental property, you may secretly wish to seek the help of a real estate agent to help in your search for the property, but you must start with the search, on your own! To hire an agent will cloud your mind with unnecessary pressures to buy, before you actually find a property which suits you the most.
Neighborhood
The quality of the neighborhood will influence the kind of tenants and the frequency of vacancies. For example, if you buy a property near a university area, then it will attract a pool of students to take the property on lease. The frequency of the vacancies will also be on a regular basis when the students will keep coming in search of a residential property.
Amenities
Take a walk in your potential neighborhood and search for current and upcoming projects, parks, malls, gyms, movie theaters, public transport, and other amenities that will attract the buyers. When you set out to search for yourself, you will get an idea on where you will find a beautiful blend of the public amenities and the best rental property.
Rent Rent is the bread and butter for your rental property, so you must be aware of the average rent in the area. If you think that by charging the average rent, you will not be able to cover the mortgage payment, taxes, and other miscellaneous expenses, then you must continue with your search! Do your search in a way, where you can discern where the area will be headed in the next five years. You may be able to afford the area in the present, but with the major improvements and the property taxes expected to increase in the future, your investment will lead you to the path of bankruptcy in the future!
Talk to tenants and homeowners
Move around and talk to the tenants and the homeowners, to know the inside story about the area. The tenant will give you an honest opinion, as they have no investment in the area.
The Bottom Line
Every state is blessed with good cities; every city is filled with good neighborhood, and every neighborhood has good properties. The challenge lies in finding all the three in a tandem order. Keep your expectations realistic when you find your ideal rental property and ensure that your finances are in a healthy state of mind, so that you can wait for the property to start reaping fruits, rather than waiting desperately for the fruits. Last but not the least, real estate investment does not mean buying a rental property- it means creating a financial situation, where you can afford to buy a rental property of your choice.
