As any property owner would tell you, there are many advantages and disadvantages to owning a rental property. However, when done well, rental properties can provide a steady and profitable income. Whether you are a seasoned landlord or just getting your feet wet, there are a few things to consider when buying a rental property.
The neighborhood may be one of the most important things to research before purchasing a rental property. There are many questions to ask when looking at the neighborhood. What is the crime rate in the neighborhood? What schools are in the area? What amenities are available in the neighborhood (parks, shopping, businesses and hiking trails)? All of these things are vital to take into consideration, because they will matter even more to your future tenants.
Another chief factor to consider is the type of property you want to invest in. Usually, the best investment for beginners is a single-family residential home. However, you may be looking for something different, like a duplex, condo or apartment. Once you’ve decided on a specific property, be sure to consider issues that could cause unexpected expenses. How old are the roof and HVAC unit? Is there any noticeable water damage in the kitchen or bathrooms? What is the condition of the foundation and exterior of the house? Most of these things will come up in an inspection, but it is important to take extra precaution with each.
Once you’ve landed on a property, it’s key to also consider your rental income. What is the average cost of rent in the area? It’s unlikely you will be able to find tenants to pay much more over the average rent in the area; therefore, you must consider if the average rent in the area will provide you with a profitable income. If not, you should continue looking elsewhere. If so, keep digging.
Property Management Services
Finally, it’s important to identify if you have access to a professional property management company. Although some property owners opt to manage their properties themselves, having aid from a property management company can be vital to the longevity of investing in rental income. McGraw Property Management & Leasing provides a number of services for property owners, such as coordinating property maintenance repairs, easy online payments for tenants and direct deposit for property owners, and a full service accounting department – just to name a few. Visit our website for a full list of services.
If you’re considering investing in a rental property and would like more information about our property management services, contact us today at (918) 592-6000.