When looking for your first rental property as a landlord, finding the best location to buy can mean the difference between making a profit and losing money. But if this is your first time as a landlord, it can be difficult to know how to find the right spot. To help, here's a handy checklist of what to look for and how to find it.
Neighborhood.. Check out the neighborhood thoroughly at different times of the day and different days of the week. Look for nearby shopping, parks, schools and restaurants. Other area aspects can affect what types of renters you attract. For example, a college or university nearby will mean mostly student renters. Alternatively, professional businesses or easy access to mass transit can mean more working adults and couples. Talk to existing owners and renters (who may be more open) about any problems they have with the area.
Crime.. If you don't live nearby, you may not know how safe the area is. The local police or public library can often provide crime statistics for the neighborhood, though. Look for types of crimes as well as rates and pay attention to whether the rates seem to be increasing or decreasing.
Taxes.. Property taxes could put a pinch on your profit margin if they are too high and you can't charge enough rent to make it worth your while. Visit the city or county assessment office to find out information on the property tax rates for the specific property.
Future Development. Look for indications of upcoming development in the neighborhood, including requests for information from the local planning office. Development can affect your rental property both positively and negatively. Additional rental properties (such as condos and apartment complexes) may mean added competition for renters. But business development, parks and malls can mean the neighborhood is growing and likely getting more upscale. Your real estate agent may also know more about changes in the area.
Average Rents and Vacancies. Finding out what you can realistically charge for rent (and actually receive) is perhaps the most vital part of turning a profit both now and in the future. You can research rent prices in the area by looking online, calling around in person and talking to real estate agents who work with other landlords. Along with rental rates, be sure to keep an eye out for excessive vacancies, listings open for long periods of time and high turnaround of renters.
Knowing what to look for in a rental property's location and how to research it thoroughly, you can help ensure your profitable future in the rental business. For more information on real estate in your area, consider contacting companies like RE/MAX INTEGRITY.