There is more to purchasing a rental property than simply locating a property within your price range and securing the necessary financing. You want to make sure that you are purchasing a property that will give you a healthy return on your investment by remaining rented. In fact, there are certain factors that you cannot afford to ignore when it comes to purchasing a rental property.
When buying rental property here are 7 factors that you want to keep in mind:
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Neighborhood – The surrounding neighborhood can impact what kind of renters you can expect. For example, neighborhoods close a university tend to have a lot of student renters, which typically means a high percentage of summer vacancies. Typically, you can charge higher rent in a nice neighborhood, whereas in an area that is more run-down, you may not be able to charge as much as you would like.
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Schools – Families tend to make stable renters, but most people want to enroll their children into good schools. Being located in a district with poorly-rated schools will lower your rental property’s value. However, buying investment property in a good school district will help to ensure that your home rents quickly and stays rented.
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Crime Rate – People want to feel safe. A home in an area with a high crime rate will be harder to rent and also command less in rent than a home in a safer area. While a property in a dangerous area might seem like a good deal because of the lower price, keep in mind that it will be harder to find quality renters to live there.
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Transportation — Access to public transportation is a huge plus when it comes to rentals. While some renters might not have a car, many people own cars, but simply prefer to avoid the hassle of driving and finding a place to park.
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Property Taxes – Since property taxes are not standard across the board, you will want to know how much you will be paying in property taxes for your rental property.
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Amenities – Without a doubt, being located near amenities like parks, libraries, shopping, restaurants, movie theaters, and public transportation hubs makes a rental property more attractive to renters.
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Amount of Listings and Vacancies – If a neighborhood has a large number of rental vacancies or homes for sale, that could be an indicator of problems in the area, a situation you should avoid.
Once you know the major factors to think about when buying a rental property, you can take them into consideration for the various potential properties you find. Luckily, the vast amount of information available instantly today at the touch of a button makes buying a home much easier than in the past. Today you can download apps that will tell you about a particular home and also give you information about the surrounding area. Now you can have a wealth of information at your fingertips when you go hunting for an investment property.
Some Popular Apps for iPhone and iPad:
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Real Estate by Smarter Agent — This app uses the internet to draw transportation, education, entertainment, government, lifestyle, services, and community locations and then maps them according to the location of your choosing.
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Crime Stats – This app gives you statistics for different violent crimes and property crimes for cities throughout the United States. You can then compare the stats to other cities and to the national average.
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CrimeMapping — You can use this app to quickly scope out recent crime statistics for a particular neighborhood.
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Walk Score – This popular app scores neighborhoods based on the ability to walk to things like grocery stores, restaurants, etc.
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Around Me – You can use this app to find out the distances to places like post offices, banks, restaurants, coffee shops, and more.
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SiteWise – This app gives you in-depth demographic data about the immediate area surrounding any property you are considering purchasing.
Some Popular Apps for Android:
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Homesnap – Simply take a photo of a home with your smartphone and the app generates a variety of data about the property, including a tax assessment, the most recent sale price, and school boundaries.
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Zillow — This popular app provides real estate listings and estimates for home values. You can also use it to be notified of foreclosures in a particular area.
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Suburb Scout – This app allows users to search for potential nuisances close to a property, including things like landfills, sewage-treatment plants, and airports.
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Safe Neighborhood – If you are concerned about sex offenders, this app will give you access to the National Sex Offender Registry and also tell you the location of sex offenders in your area.
Owning rental property can be an excellent investment. However, it is important to choose the right property to make sure that you will see a positive return on your investment and also to avoid potential problems.
