When it comes to buying a rental property there are many factors to consider.
Ultimately, you want to ensure your property will not only attract a wide pool of desirable tenants, but retain them as well.
If you’re interested in purchasing a rental property, then here are 5 tips to consider before buying.
1. Buy in a Great Location
Location has a direct impact on the value of your rental property. Which neighborhood the property is located in will determine the types of tenants you will attract as well as the vacancy rate you can expect.
When searching for the right rental property to buy, look for neighborhoods that are in proximity to universities, shopping, recreational facilities, public schools and other desirable local amenities. Having a rental property located on or within walking distance of a bus route is hugely valuable too, this is especially true when looking to buy a home in Orlando.
2. Understand the Full Financial Scope
It’s important to look at your rental property purchase as a financial investment. This means that though your aim is to make money over time, you will need to put forward a significant financial investment up front.
Before getting too far into the buying process, ensure that your finances are in order. Getting preapproved for a loan is a great way to do so. Additional financial aspects to consider include property taxes as well as insurance rates for your property. By examining the full scope of all financial elements involved, you’ll have a more realistic idea of the complete investment you can expect to make.
3. Research Local Rental Rates
Along with securing your finances, it’s vital to have a grasp on your local rental market. Research what the average rental rates are in your chosen neighborhood. It’s also wise to consider which features and amenities people are willing to pay more for. Consider property features like new appliances, HVAC systems, ample parking or anything else that can potentially command a higher rate.
4. State of the Property
You may also want to consider the level of renovations – if any- you’re willing to make to the property. Depending on the state of the property, some basic updates might be a wise investment to make in order to command a higher rental rate.
Keep in mind that if you are planning on doing some renovations, they should be ones that will yield a viable return. These generally include kitchen and bathroom updates.
5. Hire a Property Management Service
Finally, it’s important to consider the future of your property and your involvement in managing it. Ask yourself if you’re willing to manage your rental property yourself, or if hiring a property management service is a better option. Property management services give you the peace of mind of knowing that your rental income will be protected and managed professionally.
If you’re thinking of purchasing a rental property, then consider The Realty Medics’ wide range of professional property management services that will help ensure a great return on your real estate investment.