In today’s market, owning and maintaining a great rental property is a unique way to start earning extra income and building sustainable wealth for yourself. A great rental property can be a golden opportunity to earn money, while the wrong rental property can be a complete money pit. So how do you determine the diamonds from the duds? There are a few things that you can look for when shopping for a rental property that will help you determine whether not a property is worth the investment. It is important to keep these facts in mind and really think about the property you are investing in before you sign on the dotted line. If you are careful and make a smart decision about your rental property and start earning the supplemental income need to build the wealth you have always wanted.
The Quality of the Neighborhood
In the world of real estate location is everything. Perhaps you have heard the old adage that location is the only thing about a property that you can’t change. Don’t underestimate that value of the right location, people will pay a great deal of money to rend a property in the right location. When people rent, they are often more focused on where they can rent a property instead of some of the physical features that may appeal more to buyers.
Take a look at the neighborhood that you are considering buying in and think about the area. The higher quality the neighborhood the better off you will be. Don’t completely cast aside up-and-coming neighborhoods either. If a neighborhood is starting to grow and gain interest or if there are new things being built in a certain neighborhood then you may want to consider getting in on a property and investing early. If a neighborhood really starts to take off you can start charging a great deal more for your rental property and start earning even more money. While there is some risk involve, it is important to remember just how much value the right location can bring to your rental property.
Do your research, explore the neighborhood and look online to see what other people are saying about the neighborhood you are considering investing in. Remember it doesn’t matter what you think about a neighborhood, it matters what the public perception in your area is about a neighborhood.
The Proximity to Major Employers
One of the best ways to ensure that you will have some interest in a rental property is to find one that is close to a major employer. So many people want to find an affordable place to live near their work. This lets you know that you are investing in a property that you can rent out to people with sustainable jobs. Also many times, when people rent a property near where they work, they are more inclined to stay longer.
If there is a particularly large employer in your area, look at neighborhoods immediately surrounding this employer. This also gives you a great way to market your rental property. If you tie close proximity to a major employer to your listing or start marketing your rental to those working at this actual employer, you can start getting a great deal more attention on a rental than you may have otherwise had.
Know Your Property Taxes
When you start to look at a property and do the numbers in your head about how much a mortgage will be versus how much you will spend on this property, it can be easy to start getting very excited about your prospective income. However, it is important that you figure out the property taxes first. Remember, you pay the property taxes not the renter, you need to figure that into how much you will take home after you charge rent. If your property taxes are really high it can be hard to charge enough to cover the mortgage and the property tax while still making the property appealing to renters.
Keep these tips in mind when you are searching for a new rental property. Investing in a rental property shouldn’t be a rash decision. It is a decision that you need to think out and consider carefully as the wrong investment can end up costing you a great deal of money, instead of helping you earn some extra income.