They say that real estate is always a sure bet when it comes to investment, but as any failed landlord can tell you, that’s dead wrong! When you are looking to make sure that your rental properties line your pockets and continue paying for themselves, take a moment to consider some of the factors that you need to think about.
Where Do People Work?
When you are choosing a rental property, think about your future tenants and where they work. If you are looking in a suburb, it’s in the big city, and if you are in the city, they might use their cars or public transportation. If you choose a rental property in a place that is inaccessible to the places where people work, you are not going to get many desirable tenants.
Who Lives There Already?
Some renters are very responsible, and some will resist paying you every single month. It is not worth your time and your effort to pick a property where the residents are reluctant to pay, and the bad tenants are often the hardest to get rid of. Get a sense for a property by walking and seeing what the general attitude of the place is.
Every property purchase requires an inspection. Do not be fooled by a seller who wants to offer you what looks like a beautiful space without an inspection. An inspector can tell you if the repairs and the maintenance will cut too deeply into your rent revenues to be worth it. Some buildings have annual maintenance that others don’t. For example, if you purchase in the country, you may have have a company like A & W Sanitation Company maintain your septic tank. For older buildings, you’ll also have higher maintenance costs on cold plumbing or faulty wiring.
While you should always get the property tax on a specific rental property reviewed, remember that you will never stop paying property taxes. Property taxes are an important part of the cost of a property, and rental properties are hit especially hard. Take a moment to think about what the property taxes might be and to weigh them against the rent you are hoping to get.
There is a lot of charm in picking up a property that has been around for a while, but make sure that you know what goes with that history. Some properties are listed on your local historical registries, and that means that the changes that you can make are limited. Be prepared to do your research before you choose the property you are considering.
If you are looking for a rental property, remember that caution should be your by word. There is no such thing as a deal that is too good to be true, so be careful!