Be a Wise Investor When Buying Rental Property.
Purchasing rental properties is a great way to boost your assets and possible income. But, selecting the best rental property can be challenging. Below are some of the things you should check when buying rental properties.
Location
Majority of people do not like to live in boon docks. The rental property location will determine how simple it’ll be to rent. Tenants always love the idea of living in nice neighborhoods close to every amenity. They like to be close to the stores, schools, work, hospitals, and recreational locations.
Numbers
When buying rental properties, you might also want to check the numbers. See to it that you’ve noted every expense associated with the property and ensure that it has a positive cash flow. Consider the maintenance issues like any utilities that aren’t covered by tenant as well as accessing the cost of big projects including new roofing, furnace replacement, landscaping etc. Such projects happen only once every 15 to 20 years, yet you might be coming into this in the tenth year of that cycle. Take note that you should calculate your income low and expenses high. This will save you an ample amount of money in the long run.
Lower Maintenance Buildings
It is a wise idea to avoid the rental properties that require expensive routine maintenance. Several examples could be homes that have wood sided buildings, cedar-shake siding or shingles, cedar decks, brick driveways, and many more. Try looking down the road and know the other maintenance needs it would require in the long run. Remember that the lower the maintenance, the larger the profits and lesser headaches.
High Prices
Check in the areas with high home prices because it increases the demand for rental property. Look for an ugly house in the block that comes with a lower price, allowing you to buy within the margins. After some exterior and interior paint, a bit light of landscaping as well as new curtains, a house will get premium rent due to the neighborhood class. If people can’t afford buying a home in this class, they’ll have to rent. It will also create demands for rental properties.
Good Rental History
Every time you are purchasing rental properties, you should check rental history. Know how long the tenants are staying and determine if they pay rent on time. Several areas of a town are quick turnover times.
Below Market Rental Prices
Look for the properties that have below market rent prices. These will let you raise the rent and boost the property’s value. As per above, it might require a little work done to enable raising rental prices. The market value of the property is determined by the amount of the income received by rental properties. But, you have to take note that if the rental properties have tenants when you purchase it, they might not like this if you raise the rent price. In addition to that, know what kind of lease is in place as it goes with the sale.
