Purchasing your first rental property is a challenging experience. Just like buying a standard home, where you'd need to think about everything from the number of bedrooms you need to the amenities you need access to, there's a lot to consider with a rental property too.
Since real estate is always a big investment, we thought we'd help you out with your upcoming purchase, by highlighting five critical things that all buyers need to look for in a rental property home. While everyone's idea of the ideal rental property will differ, these important elements will ensure you're spending your money on property with potential.
When you're buying a home for yourself, you need to make sure that you're choosing a home that you can afford. That means that you need to know how much you have to spend on the deposit, the legal fees, and getting our friends over at Bellhops Moving Carolina to move your furniture. The difference with purchasing a rental property is that you'll probably have additional expenses to think about too, like redecorating the home, making repairs, and hiring a management team. Make sure you know your budget before you get started.
2. Rental Yield
With a basic idea of how much you can afford to spend, you can start to think about the fun parts of buying an investment property - like how much you could potentially earn. Speaking to a property management expert will help you to find out more about what you can reasonably charge for property in a certain area. This should give you an insight into what a potential property is worth in terms of long-term rental yield.
Whether you're buying a property for your family to live in, or you're looking for something you can rent out to other people, you always need to put location first with real estate. Look for a property in a neighborhood that has potential. That means keeping your eyes open for plenty of surrounding amenities and attractive features. You can also look online to find out information about crime rates and real estate growth figures too. If you're having trouble finding the right location, try speaking to a real estate agent.
4. Good Condition
One of the easiest ways to make money on your rental property is to buy a home for cheap that you can then fix up and rent out. Of course, it's important to make sure that you don't cut corners so much to keep costs low that you're renting out a dangerous home. Make sure that you have any property you're thinking of buying properly inspected before you make any decisions. Look out for anything from signs you need to repair the roof, to the potential for mold or moisture damage.
Finally, figure out how much time and effort it's going to cost you to maintain the home over time. Go for a property that's going to be easy to spruce up, so you can make it look as nice as possible with little investment and remember to work with a rental management company to make your life as a landlord as stress-free as possible.