Are you looking to purchase and profit from a rental property? There are many things you should consider when looking for an income property.
Start your search:
While you may want a real estate agent to help you complete the purchase, you should start searching for a property yourself first. Consulting an agent can bring unnecessary pressure to buy before you are ready. It is important to take an unbiased approach visiting all of the properties and neighborhoods in your investing range. However, there are other factors you take into consideration.
Schools: Keep family-sized accommodations in mind. You will need to consider the quality of local education facilities. Because if the property is good, but the nearby schools are non-existent or poor, it may affect the value of your investment.
Crime: This is common sense. No one wants to live in an area riddled with criminal activity. Go to the library or the police for crime statistics for various neighborhoods. Problems you should look for are serious crimes, vandalism, recent criminal activity, petty crimes, etc. You may also want to ask about how frequently the police are in the neighborhood.
Neighborhood: The quality of the neighborhood will influence both your vacancy rate and the types of tenants you attract. For example, if you were to purchase a property near a university, chances are your tenants will mostly be made up of college students and will be vacant during the summertime, etc.
Natural disasters: Insurance is another expense to keep in mind. It's good to know how much money you should save up in case of a natural disaster. If the area is prone to flooding or earthquakes, paying for extra coverage can eat away at your rental income.
Property taxes: Although property taxes are not uniform across some areas, as an investor planning to make a profit, you need to be aware of how much you will be losing to renting it out. High property taxes don't have to be a bad thing if the neighborhood is a good area for long-term tenants, but that isn't always the case. Your local municipality assessment office will have all of the tax information you need on file. You should also consider the likelihood of property tax hiking in the coming years.
Job market: Areas with growing job opportunities typically attract more people --- meaning more tenants!
There are many more steps you will need to follow before purchasing a rental property. How will you start with your investment?
