Things to Think about Before Making a Rental Property Investment

Do you want to buy a rental property? If so then you have come to the right place. This guide will show you what steps you can take to ensure your purchase is a success while making sure that you don’t make the top mistakes that many people do along the way.

Neighbourhood

One of the first things you need to give thought to would be the neighborhood. The neighborhood that you choose to buy in will determine your vacancy rate, a lot of the time. If you want to help yourself then you may want to buy near to universities. If you do this then you will be able to dominate the pool of tenants. You may also find that you can fill whatever vacancies you want over the summer too. If you can, you need to take note that in some towns,  you may find that people don’t want to rent in the area because of permit fees and red tape. If you want to avoid this then do your research and consider whether you want to rent or flip properties. If you do sell homes then you will need to give thought to things like deeds too, so keep that in mind.‍

Taxes

Another thing you need to give some major thought to would be things like taxes. At the end of the day, property taxes are one of the biggest costs that you will have to pay, and a lot of the time, they can vary quite significantly. If you want to do something about this then one thing you can do is make sure that you understand what it is you’re investing in. High taxes might not always be a bad thing as if the house is in a good area then this is the best way for you to attract tenants over the long-term. If you have an assessment office nearby then this will have all of the information you need about the community and the property you intend on investing in, so keep that in mind if you can.

Schools

Consider the quality of the local schools that are nearby and if you are buying a family home, give some consideration to the fact that you will want monthly cash flow and that you will make a substantial amount of money when the time comes for you to sell. If there are no good schools nearby however then this will impact your investment quite a lot, so try and keep that in mind.

Crime

Nobody wants to live next door to where there may be criminal activity, so try and make sure that you take into account the crime rate of the area you intend on investing in. Although you may be concerned with things like cash flow, you have to remember that if criminal activity is on the rise, this won’t just affect your tenancy rate. It will also impact how much your property is worth over the long run, so try and keep that in mind.

The Job Market

Locations that have a lot of growing employment will attract way more tenants. If you can, you need to look out for announcements from major companies who might be moving to the area. You also need to bear in mind that businesses may cause housing prices to shoot up, which is the last thing you need. If you want to help yourself here then assess whether or not recent changes in the area are inflating house prices.‍

Amenities

Next up, you have to give some thought to things like amenities Tour the neighborhood and be sure to check out the parks, the restaurants, and any nearby movie theaters. If you can, be sure to take note of public transportation links. Things like this may attract people and this will result in you getting a boost to your rental property. If you want to help yourself here then try and make sure that you are looking out for new developments that could hurt the price of surrounding properties. Although new properties in the area might seem like a good thing, they can cause extra competition should you want to sell yours shortly. You may have to sell yours for a lower price as a result which can impact your investment more than you realize.

You also need to take the time to think about natural disasters and how prone the area is to things like this. If you can do this, you will find it easier to predict things moving forward with your investment.

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