There are many different ways to invest in real estate. For instance, rather than selling a current property, you may choose to rent it out—especially if you own it free and clear. If you don’t own a home that you want to rent, however, finding one can be a challenge.
Many variables weigh into whether a house will be a profitable investment. In fact, one of the most important factors is knowing how to pick the right neighborhood for a rental.
3 Tips on Choosing the Right Neighborhood for Your Rental
1) Stable Housing Market
While high appreciation trending in a property’s neighborhood could sound enticing, a stable housing market actually allows for longer-term profitability.
Housing markets in cities like San Francisco and New York City can net huge gains… and huge losses, too. Leave all that drama and heartache for the high school kids. Many will tell you boring is better in rental properties. Our experts look for markets throughout central Florida that consistently demonstrate somewhat smaller, yet stable growth.
2) Sale Price vs. Rent Rate
As an Orlando real estate investor, your eye should always be on the bottom line. While not every property will immediately net positive cash flow, good investments will gain momentum over time.
Knowing how to spot good investment properties takes a trained eye from someone with years of experience. Our realtors stay up on the forefront to marketing trends, which allows them to know what areas provide outstanding financial opportunities.
Finding investment homes located in landlord-friendly areas is important, too. This means fewer guidelines and restrictions—including evictions and landlord licensing requirements—that can hamper investment owner activities.
3) Type of Housing Units
Potential investors should also consider what type of property they want to purchase (i.e., single family, duplex, or multifamily units). This can alter everything from the initial capital needed to monthly maintenance costs, which will affect the owner’s bottom line.
Single-family homes or duplexes offer the easiest entry points. They require smaller investment startup funds and have fewer maintenance issues on average. However, in certain areas, if an investor can afford it, purchasing a multifamily unit will reap far higher returns. Our investor experts will carefully outline everything required in purchasing multi-unit buildings like apartment complexes. But we insist on only the highest quality renting facilities: slum lords need not apply.
Additional Factors to Consider
Of course, location remains the most important factor in identifying good rental properties. Places near amenities, green spaces, and good schools will nearly always be safe bets. A strong job market in the area, especially now, will dictate the attractiveness of a neighborhood for potential investing.
Homes in areas near American-based industries, medical centers, universities, important infrastructures, and large distribution facilities provide good renter demand, as well. If additional big businesses announce plans to move into an area, the surrounding neighborhood rental market will benefit. New businesses guarantee their warehouse workers and shipping department personnel will need places to live nearby.
Want to Know How to Rent Your Home?
Our Orlando real estate experts at The Realty Medics pride themselves on delivering amazing customer experience and local market expertise. As a full-service turnkey real estate broker and rental management company, The Realty Medics can help with identifying your ideal options.
Knowing which neighborhoods offer the best real estate opportunities is our specialty. Interested in learning more? Call us at 321-947-7653 or complete our contact a real estate investment professional online form.