Are you considering purchasing an investment property to rent? Whether it’s the property appreciation or the potential for monthly income that has you considering becoming a landlord, finding a rental property can prove to be more difficult than you would expect. With our tips, you’ll be able to find a rental property that suits your needs and is alluring to potential tenants.
Do Your Research
By reading up on investment properties and speaking with realtors you will learn how to assess property value, find the right location, and understand market conditions, all of which will give you the confidence to find a quality rental property.
Keep in mind that the location of your potential rental property will have a huge impact on the quality of tenant and the amount you can charge for rent, all of which can impact your revenue.
Factors that people consider when finding a place to rent:
- Proximity to work
- Parking for vehicles
- School quality
- Neighborhood quality
Calculate Your Cash Flow
The main benefit for investing in a rental property is to make a profit, but if your expenses are higher than the average rent in the area you purchase in, you’re going to lose money. To ensure this isn’t a problem you’re going to face, factor together all of your expenses up front and research the average rent in the area where you are looking to buy.
Your biggest ongoing obligation is going to be the mortgage, followed by taxes, insurance, utility bills, and upkeep. Before making a purchase, try to obtain the current figures for the property to help you make a more informed decision.
Buy at the Right Price
Once you have factored in your projected cash flow and any lending requirements, you’ll know how much you’ll be able to afford and can start looking for a property.
- Work with a real estate agent that has experience working with property investors
- Aim to pay 10-20% lower than market value
- Compare contractor quotes for property repairs and upgrades
If you need help finding tenants or managing your property or want help finding your next income property, give Lamacchia Property Management a call at (855) 213-3410.