As you search through real estate market, you are going to find countless of properties offered at affordable price. If you plan to invest in rental property, then now is the best time for you to do it. However, have you ever thought of the ways on how you can choose a rental property that fits your needs?
In the next paragraphs, you are going to discover the questions that would help you in evaluating rental investment property.
Question number 1. What’s the location – this one is not really surprising because when buying real estate, the location plays a big role in it. And whether you like it or not, the overall value of the house will be determined by the location it has. You on the other hand have to be mindful of the maturity of the neighborhood and a good range here would be 10 to 35 years.
It is not impossible to maintain the minty condition of a property, so long as it receives regular maintenance. Then again, neighborhoods that are older than 35 years usually have a number of run down houses that make it more difficult to be chosen by renters and typically involve high upkeep. But you should not lose hope because there are also rare finds that you would see in such neighborhoods, you just need to be vigilant.
Question number 2. Does the property has acceptable condition – before you can start marketing a property, you will have to perform maintenance and repairs on it to make it appealing; and this will be done as well even when it is rented. Usually, the best deals are demanding the most work.
Always take into account that on top of the initial repairs as well as renovation that has to be done to turn it as an appealing property among renters, you’ll be performing ongoing repairs and maintenance. As a general rule, it will cost you more on maintenance for older homes.
Question number 3. What’s the price you’re willing to pay and how much it’s worth – when it comes to the property, there are factors that must be considered too such as current market price, what’s the price ratio to the property’s size, can you sell it and can you do it on the given timeframe you’d like it to sell. These would be the things that you need to be mindful about when making a purchase.
Question number 4. How much income it can bring you – you need to do your research here and by research, you should figure out how much the property would bring you for rental. Furthermore, you should assess if the rent would be sufficient to pay for expenses and still have room for profitability and factor other expenses too such as insurance, mortgage, vacancy for 90 days and maintenance.