The 4 Characteristics of an Investment-Worthy PropertyOctober 7, 2016 / byArs Lexis / Categories : Financial Sense
You may already know the value of investing, whether in stocks or mutual funds or other forms. The most appealing to you is real estate, you have the money but are asking how to invest in rental properties? Making such an investment requires knowledge of the characteristics of a profitable piece of property. Here’s how you know which ones to purchase.
Americas Housing Alliance, LLC and other property listing sites say that one of the things you need to consider when choosing a rental property is to invest in a good neighborhood. This is a huge factor for many potential tenants because they want to feel safe, feel convenient, and want a lot of other things accessible to the place they live in. For example, buying or renting a property near schools and colleges may reduce your market to students and families with children.
You may have seen properties that were at a rock bottom price, but this may be because of the crime rate of the area. Who wants to live in an apartment near a criminal hotspot? Visit the local police and library to determine the crime rates for different neighborhoods on your shortlist. The signs you need to look for are petty and serious crimes, vandalism rates, and if these activities are decreasing.
Rental properties near employment opportunities attract potential lessees or long-term buyers. Watch out for news about medium to big companies relocating or establishing their presence near a certain neighborhood. This will most likely attract job seekers, improving your chances of getting a long-term tenant.
Potential Rental Income
The income that the property generates is the main reason you bought it. This is why it is important to identify the rental rates in your chosen neighborhood. If the average doesn’t cover your expenses or just breaks even, start looking somewhere else.
Once you tick off these characteristics and you have a good value deal when you decide to buy or rent that piece of real estate. Do your research and you won't regret it.