As you search through real estate market, you are going to find countless of properties offered at affordable price. If you plan to invest in rental property, then now is the best time for you to do it. The thing is, how you are going to pick a rental property that is perfectly suited for your needs?
In the next paragraphs, you are going to discover the questions that would help you in evaluating rental investment property.
Question number 1. What’s the location – this isn’t really a big surprise after all because location plays a big role when buying real estate. And whether you like it or not, the overall value of the house will be determined by the location it has. On the other hand, you need to take into consideration as well the maturity of the neighborhood and 10 to 35 years would be a good range.
Properties are likely to be in excellent condition by performing regular maintenance. Then again, for neighborhoods that are over 35 years, it normally has run down houses which makes it more challenging to be picked by renters and have high upkeep. But don’t lose hope because there are rare finds you’ll see in such neighborhoods; you just have to be vigilant.
Question number 2. Does the property has acceptable condition – all investment property is going to require maintenance and repair and this takes place before putting it on the market and while it’s being rented. And oftentimes, the best deals deliver the most work.
Always take into account that on top of the initial repairs as well as renovation that has to be done to turn it as an appealing property among renters, you’ll be performing ongoing repairs and maintenance. And for older homes, the maintenance cost can be higher.
Question number 3. What’s the price you’re willing to pay and how much it’s worth – as for the property in question, is it below the market price, what is the ratio of price to size, will you be able to sell it on the time you want it to sell? These would be the things that you need to be mindful about when making a purchase.
Question number 4. How much income it can bring you – you have to do research here and with that, you must find out how much the property can bring in for rental. Not only that, check as well if the rent would be enough to cover expenses and still have room for profitability and factor other expenses too such as insurance, mortgage, vacancy for 90 days and maintenance.