Buying a Radford rental property can be a terrific investment. On the other hand, in order to ensure that the property you want will provide the returns you’re wanting, it’s necessary to know what to look for. Some single-family houses make better rental properties than others. It would be really helpful to look for the right details when looking at investment properties to know and distinguish those with profit potential from those that will lose money. If you find a property with these qualities, you can feel assured that you have a solid prospect for your next investment.
One of the most important qualities of a good rental property is the market in which it is located. As a general rule, the most profitable rental homes are those located in developing and growing real estate markets, where rents are going up, and the demand for rental houses is strong. The location of the property will also determine things like your tenant pool and rental strategy.
Other markers to watch out for include a strong local job market, low crime rates, and future development plans. You’ll additionally need to know as much as you can about nearby amenities, public transportation, and factors of the property that might be trendy or in-demand. To maximize the return on your investment, it’s essential to have a deep understanding of each aspect of the local rental market before you acquire it.
Very closely related to property location is the price. Not only do you need to find a rental property that is within your budget, but it should also be priced at or below market rate for the area. When trying to figure out the property price, keep in mind to cover things like closing costs, repairs, and insurance. A truly affordable rental property is one that you can buy while still having some cash reserves leftover.
But at the same time, it is a matter of fact that the lowest priced property may not be the best value. If the property is priced well below comparable properties in the area, it’s worth looking into it to find out why. It’s highly probable that you may have unmistakably found an attractive deal that grants instant equity from day one.
One additional vital number you’ll need to look at when picking a rental property is cash flow. A suitable rental property will consistently give a solid positive cash flow. What that means is that you should be earning a profit greater than your property expenses every month. To determine whether a property will provide positive cash flow, you must first do a rental property analysis. See to it to include all property-related expenses, especially those that are generally missed. If, after you’ve gone over the numbers, you are kind of confident that the property will have a positive cash flow, you might have a beneficial rental property.
Part of calculating your numbers will necessarily include the cost of any repairs and maintenance. All single-family houses need regularly scheduled maintenance and repairs. But, in actuality, some fraudulent sellers may try to hide major issues, ones that would be expensive or time-consuming to repair. If you live rather far from your rental property or don’t have experience with home remodeling and repair, be sure to include property management costs in your calculation.
But take note, though it may seem tempting to try and manage your own investment property, especially if it is your first one, in nearly all cases, it is more efficient and cost-effective to hire a professional property management company, such as Real Property Management Insight, to do it for you. Just really make sure to do some research and find out how much the monthly fees and other costs will be so that you can factor them into your budget.
By taking advantage of these attributes to assess each property, you can more promptly and confidently be able to distinguish which properties would make a good investment.
Have you found your next rental home but need someone to help you manage it? Real Property Management Insight is here to help with whatever you need! Contact us online or give us a call at 540-998-6917.
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.
