Investing in a rental property is profitable – it ensures a fixed income for the owner. However, finding the right rental house might not be as easy as you assume. There are several important factors that you must keep in mind while buying rental property in order to attract the best renters.
Let’s discuss the top 5 features that you shouldn’t ignore when investing in a rental property to generate maximum rent.
Top 5 Features of a Profitable Rental Property
1. Good Neighborhood
Selecting the neighborhood is super important when it comes to investing in a rental property. The neighborhood is crucial because it helps to determine the rent of the house – the nicer the location, the more the rent will be and the more the demand will usually be as well.
Aside from the rent, the vacancy rate of the area also plays a crucial role when selecting the right neighborhood. Even when the area is posh and the rents are high, you shouldn’t invest in one if the vacancy rate is also high.
2. Lower Crime Rate
Another important aspect you must keep in mind while purchasing a rental property is the crime rate of the area. No one wants to live next door to a location that is considered a criminal hot spot – it affectstheir safety. To ensure your tenants’ safety and provide them a sense of security, you should invest in a neighborhood where the crime rate is absolutely minimal.
But how do you find out the crime rate of a certain area?
Well, the area’s local police department as well as the public library has accurate, up-to-date crime statistics. You can check there about the crime rate of the locality.
3. Good Rental Rate
Before investing your life’s savings in a rental house, you must keep an eye on the rental rate of the area. Understanding the rental rate will help you a lot in your decision-making process which would result in a better investment.
As the rent from the house is going to be your bread and butter, you need to do extensive homework before buying it. Make sure that the house generates enough rent to pay your bills, cover your mortgage payments, taxes, and other expenses as well. If the rent of the area is not enough to cover the expenses, it’s better not to invest in the area.
4. Lower Property Taxes
One thing you must keep in mind before buying your rental property is that the property taxes differ from area to area. While some locality has moderate taxes, other posh areas will charge you high taxes depending on the amenities it provides. As you are planning to rent the house for an income, calculate the amount of money you have to pay as taxes before investing. It will give you an idea about your net income beforehand.
If you are investing in a family-sized rental house, don’t forget to check out the educational quality and facilities of the neighborhood. Excellent schools nearby would attract tenants with kids and would also increase the rents of your house. In addition to rents, having good schools in the locality has the potential to increase the sales value of your house.
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