When investing in a rental property, you obviously want to buy that property which is the one most likely to offer the highest returns. While there is no way to guarantee the benefits you will receive from an investment property, there are two key factors to look for in a property that will help significantly increase your chances of enjoying the profit you seek.
Location, Location, Location
Everyone knows that “location, location, location” is the number one rule of real estate, and this is absolutely true when it comes to rental property. Therefore, the first thing to consider is the neighborhood in which the property is located. While you may not be able to afford property in the city’s hottest neighborhood, there may be some great options available within an up-and-coming neighborhood.
Consider the location in terms of available services, schools that serve the neighborhood, and proximity to employment opportunities. Crime rates and vacancy rates are also important considerations. After all, if you buy a property in a relatively safe location where vacancy rates are low between rentals, you probably won’t have a hard time finding a tenant. Similarly, you will be able to get a higher rental price if your property is located in a desirable area.
Average Rental Prices For The Area
You can increase your profit by increasing your rent, but you also cannot increase the cost beyond what the market will accept. Therefore, you should research the average rental price of properties in the area so that you can have a clearer idea of how long you can expect to reasonably apply for your property. Subtract this from all of your costs, including mortgage costs, property taxes, insurance, and maintenance, to get a clear idea of how much you can ask for your property to maximize profits.
Conclusion
Having a rental property comes with a lot of responsibilities, but if you do it right, it can be a high return on your investment. Real estate investing can be a lucrative way to increase your overall income.