What to look for when buying a rental property?
Buying a rental property in the right neighborhood is the best investment that can provide you long-term returns. You will need to do extensive research on the rental property you want to buy before making a purchase decision. However, it can be pretty time-consuming and overwhelming to find the right rental property if you don’t have a real estate expert to guide you. Vision Real Estate is among the leading property firms in New York. We deal in buying/selling a wide range of residential, commercial, and investment properties across New York. So, if you are looking for a reliable property firm to assist you in making a profitable rental property investment, our expert realtors would love to help you. Our realtors will assist you in finding the most profitable investment properties that fit your requirements.
But how can you determine if a rental property investment is good or bad? Well, there are a few factors that are common in all profitable rental properties. We have compiled a list of factors that you should look for when making a real estate investment.
The rental property’s location is the top factor that directly impacts your return on investment on the rental property. It will determine which type of renters your property will attract. For example, if you buy a rental property in a high-end residential area, you will attract long-term tenants. However, if you buy a beach house rental property, you will most probably attract seasonal tenants such as tourists. Therefore, you will need to determine what type of tenants you want to attract.
When you are considering buying a rental property, some fixed expenses will come with this type of investment, such as property tax. The property tax will vary depending on the location of the rental property. Therefore, it is crucial to estimate potential property tax increases in the coming years to decide how much rent you should charge for desired return on investment in the long term.
Calculate estimated return on investment
When buying the rental property, you should also consider all the possible expenses such as property tax, repair, maintenance, pest control, monthly expenses, etc. Make sure to calculate the expected return on investment you can get from the property. Setting a goal of how much return on investment you want and comparing it with an estimated return on investment on a particular property will help you decide whether the property will be profitable or not. Our real estate experts also provide valuable insights and advice to clients in determining whether the investment will be worthwhile in the future or not.
When you are investing in a rental property, it is also crucial to consider how much expenses you might have to spend on repairs. If you are buying a fixer-upper, get a property inspection to ensure the property is of good quality and will not need regular fixing. Otherwise, you might lose more money in fixing the property frequently rather than making profits on it.
If you have found a rental property that you want to invest in, make sure to conduct thorough market research on whether the property rents are likely to increase in that area. If there will be a new residential development in that area, it might hurt your rental income opportunities. Therefore, it is crucial to consider the market conditions when investing in a rental property, especially when buying a property located in a developing area.
The surrounding amenities are also a crucial factor that affects your return on investment from the rental property. Usually, properties located in areas with easy access to public transportation, parks, restaurants, gyms, movie theaters, schools, etc., attract more renters. It is a significantly profitable investment and provides high returns on investment.
If you have decided to buy a rental property, it is highly recommended to consult with a property firm for expert assistance.
Schedule a consultation with our property specialists for expert property assistance today!