Tenets of a Successful Rental Property Investor
To call
location important to rental property investors would be an understatement. The
location of a rental property can play a vital role in determining what kinds
of returns you’re likely to see from such an investment. So, if you’re
currently in the market for your first rental, take care to conduct some
location research before proceeding to put forth any offers.
To help
determine a location’s overall desirability, there are a number of key factors
you’ll need to look into – with the local economy, population size, and rate of
growth chief among them. These factors – as well as others – will provide you
with a clear picture of how much demand for housing exists within a given area.
Needless to say, the more demand there is, the more profitable a rental
property in this area is likely to prove. Local property values and rent prices
should also be taken into careful consideration. After all, if properties that
are similar to the one you’re looking at are being rented for fairly low rates,
it’s reasonable to assume that you’ll be unable to get much more out of local
renters. So, when considering how to invest in real estate, one must never discount the
importance of proper research.
Insistence of
Assessing the True Value of Properties
As any
experienced investor will tell you, purchasing a rental property that hasn’t
undergone a professional inspection is a risk that isn’t worth taking.
When investing in something as expensive as a rental property, it’s strongly
recommended that you know exactly what you’re getting into. So, no matter how
many personal walkthroughs you’ve done, every rental you invest in should be
meticulously inspected by a certified professional.
For
starters, a professional inspection will ensure that you have a solid
understanding of a property’s overall condition. There are multitude of
problems – ranging from relatively minor to extremely serious in nature – that
are likely to escape the gaze of non-professionals, and if any outstanding
issues rear their heads long after a sale has been finalized, you may find
yourself struck with an acute case of buyer’s remorse. Secondly, in the absence
of a formal inspection, you may find yourself unable to buy landlord insurance
for the property.
The results
of an inspection can also provide you with justification for requesting a
reduction in price. After all, if an inspector turns up any problems that the
seller was unaware of or neglected to mention, you have every right to ask that
they adjust their asking price to reflect the cost of making necessary repairs
or renovations.
Willingness to Properly
Screen Potential Tenants
If you take
on tenants who are unable or unwilling to keep up with monthly rent, you’re
going to have a hard time profiting from your first rental. To limit your odds
of allowing unreliable renters to occupy your property, take care to screen every prospective tenant who submits an application. With
each individual’s permission, you should look into their respective monthly
incomes, employment situations and criminal backgrounds. You should also make a
point of getting in touch with any references they provide, especially
employers and previous landlords. If you can’t be troubled to carry out the
screening process on your own, reach out to a highly-rated screening service or
delegate this task to any property managers in your employ.
