10 Tips to buy rental property for investment
(Edited Oct 10, 2017)

Rental property investing can be attractive for people who are unwilling to risk their investment money in stocks. In any case, investing in a home can have its issues as well.

There are few tips you might need to know when considering buying a rental property, they include:

1. Location

The location is one of the determining factors to how easy your rent will be. You may receive a more prominent response from the area where you have a lot of vehicle traffic than you will from a newspaper advertisement.

In addition, tenants want to live in decent neighborhoods close to all the amenities such as schools, hospitals, recreational centers, work, and hospital.

2. Neighborhood Is Improving or Stable

If you see any declining neighborhood, clearly stay away from such neighborhood. In spite of the fact that these may look great because of the low price tag, they are extremely difficult to gather the rents.

By finding a stable or improving neighborhood, it will be very easy to rent the property and hence, increase the rent. In general, the better the neighborhood the higher the price tag and the higher the rent costs, hence there is a large margin for profit. Also, the poorer the region the lower the price tag and lower the rent costs reducing the net revenues.

3. Lower Maintenance Buildings

Homes that will require expensive routine maintenance must be avoided. Try to observe critically and determine the future maintenance requirements.

4. Buy Properties That Will Be Prepared To Rent Instantly

After buying your property, you will be responsible for the insurance, land taxes, and mortgage; so you probably need to get your properties leased as soon as possible. Renovating your property immediately after purchasing will only increase your debt and make it difficult to recover any money spent. Therefore, renting your property is the best way to make money.

5. Buy Quality!

It is not necessary for you to have the most alluring house in the neighborhood, yet you should still buy quality. Ensure the house is in great condition and without the need of major repairs. Cleaning and a little painting are enough repairs to get a property ready for tenants. Doing this will save you more cash.

6. Out of State Owners or Managers

When purchasing a rental property, always look for properties that are owned or supervised by out of state owners. It is difficult to oversee rental property from out of state because when these come up for sale, the owners are more concerned with selling quickly.

For you to rent a place quickly, you must live close to the property so can immediately show it at the renter’s request. Most buyers will request to see the property in the next 30 minutes or so. These requests must be attended to because most renters need somewhere to stay within the next few days and may not wait until you are less busy to see the property.

7. Numbers

Another important tip when buying a rental property is for you to check the numbers. Ensure you have all the expenses related to that property and make sure it is still valid. Consider the maintenance issues; amortize the cost of new roofing or landscaping, and other utilities not covered by the tenant.

8. Make Sure The Property Conforms to Zoning and Fire Codes

Verify whether there are assessments required by local authorities for rental properties and make sure this property pass those inspections. You may not know the main reason the current property owner is selling the property.

It may require further repairs to pass the assessments. An inspection will also be made before restoring power if the electricity has been down for over 3 months.

9. Good Rental History

It is recommended that you check the rental history when purchasing rental properties. Check to verify how long tenants are staying and how fast the pay their rent. Some neighborhoods close to the airports, nightclubs, etc. are normally fast turnover times.

10. Under Twenty Years Old

Restricting your selection to buildings that are below twenty years will limit the chances that the building will have any maintenance or building code problems.

The building could be close to the maintenance cycle for paint, furnace, and roof yet the structure will be firm and not needing much renovation. This will help you save a lot of cash in the long run.

Being a landlord is a business that also needs to be maintained. Make sure to make wise decisions and don’t let money be your primary concern. After all, you want more than just a few monthly incomes. Always consider the future before making any decision because you want to invest in a property that will keep the cash flowing long after the mortgage has been paid off.

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