Here are 10 key things you should consider when searching for the right rental property:
- The Locale – Depending upon what kind of tenants you hope to attract, the neighborhood you choose will have a major bearing. Buying near a college will likely attract students. Areas with elementary schools nearby will appeal to families with children.
- Property Taxes – If the neighborhood is excellent, you may not mind paying higher property taxes. Check out the tax records to see how often property taxes have risen. Also, talk with people living in the area to get a better understanding of tax rates.
- Local Education – Poor or non-existent schools can be a problem if you have families with children as tenants.
- Low or No Crime – Check with local police to determine the status of the neighborhood you select. Asking the owner who is trying to sell to you may not reveal all the facts. Also, look into the frequency of police presence in the neighborhood.
- Employment – You will have a larger tenant pool in location where the job market is alive and well. When a major company moves into an area, there will be a growing need for housing for the workers. But be aware this may cause house prices to go either way depending on the kind of business coming in.
- Comforts and Conveniences – Parks, malls, gyms, and easy access to public transportation are all perks for renters. Public amenities and private property can be a positive combination for a neighborhood.
- Future Growth – Check with the local planning department to see if new development is coming to the area. Business parks and malls can be a nice addition, but be alert for new development that could become competition for your rental property.
- Vacancy Fluctuations – Vacancy rates can give you an idea of how successful you will be at attracting tenants. High vacancy rates can result in lower rents to attract tenants and low vacancy rates are an opportunity to raise rental rates.
- Rent Rates – Rental income is the central focus of your rental property, so you need to know the average rental rates in the area. Remember, you must be able to cover your mortgage payment, taxes and other expenses, before realizing a profit.
Once you make the decision on your rental property, you may also decide to let the professionals do the managing while you enjoy the profits. If so, give us a call. Cousin James Management is a rental owner’s best friend. We’ve been managing property and helping owners with the heavy lifting for many years. We’re here to help.