Choosing to invest in real estate as a rental property can involve very different considerations than investing in that property for resale. You not only need to look for different traits, but you also need to be prepared for certain costs and obligations. Here are seven considerations you should make when looking for a potential rental property:
- What kind of residents live in the neighborhood?
- Before you can develop a rental property, you should know what kind of people you will likely be renting to. A suburban area with a large number of working families will involve very different issues than a college town where most renters will likely be students, as an example. Make sure to plan accordingly, and ensure you are prepared for the issues your renters are likely to bring.
- Are there issues with crime in the area?
- People tend to prefer to live in safe areas, and may balk at renting in a location with a high rate of burglaries, robberies, and other crime. To attract potential renters in a high crime area, you will likely need to charge much lower rent than you might otherwise get away with, and will need to ensure your property has adequate security.
- What are the property taxes like?
- Property taxes can be a double edged sword when it comes to investing in a rental property. On the one hand, it makes holding onto the property far more expensive. On the other hand, high property taxes often go hand-in-hand with high quality schools, making them more appealing to certain types of renters who may be willing to pay more to ensure their children get a good education.
- Is the property close to public transportation?
- Many people rely on public transportation like buses and trains to shop, commute to work, and otherwise get around. This makes easy access to public transportation extremely desirable for many renters, and thus a good thing to look for in a rental property.
- Is there shopping or other amenities close by?
- Almost everyone likes to be close to shopping centers, grocery stores, public parks, gyms, theaters, and other amenities. The easier it is to access these things, the more valuable a rental property will be to any prospective tenant.
- Is the area prone to floods, fires, or other disasters?
- Unfortunately, natural disasters are unavoidable, but some places are far more vulnerable to issues like fires, floods, or storm damage. You should be wary of these potential hazards, and ensure any rental property is properly insured against likely natural disasters.
- Is the area growing or shrinking?
- People tend to prefer moving to a community that looks like it’s growing, while they tend to avoid places that seem to be shrinking. Growing communities will tend to have a lot of planned construction and development, while shrinking communities will have high rates of vacancies and foreclosures.
At Liongate Homebuyers, we assist our clients with a variety of services related to buying and selling real estate, including purchasing homes for cash. We have experience handling real estate financing, especially for developers and house flippers. If you are interested in selling your home for cash, please contact us at 516-548-6553, or visit our contact page.
