A good rental property possesses the quality of being in a good healthy market. Generally, the profitable rental homes are those in growing real estate markets, where demand for rental houses is strong. The location of the property will also define details like your tenant pool and rental strategy.
Other signs to look for are a strong local job market, low crime rates, and future development plans. Gather as much information as you can about nearby amenities, public transportation, and features of the property that might be trendy or in-demand. To maximize the return on your investment, make sure you have a firm grasp of the local rental market before making any decision.
The price of the property is quite dependent on its location. A good find would be a rental property that fits your budget, and one that is priced at or below market rate. When calculating the property price, don’t forget to include things like closing costs, repairs, and insurance. When you find yourself with leftover cash reserves, you’ll know that you’ve found yourself an affordable rental property.
The lowest-priced property, though, isn’t automatically the best value. If the property is priced well below comparable properties in the area, you might want to find out why first. It’s probable that you’ve found a great bargain that offers instant equity at the onset!
Cash flow is something you’d also want to look at when choosing a rental property. An excellent rental property will continuously provide a strong positive cash flow. In short, you should earn a profit beyond your monthly property expenses. You’ll need to do a rental property analysis to assess whether a property will provide positive cash flow. Always incorporate property-related expenses, especially the ones usually ignored. If, after all the calculations, you still end up with a positive cash flow, you have a good rental property.
Part of calculating your numbers will also include the cost of any repairs and maintenance. All single-family houses require regular maintenance and repairs. Nevertheless, don’t be careless; there are shady sellers that might not reveal any major issues that might cost you resources and time. If you stay somewhere far from your rental property or don’t have experience with home remodeling and repair, be sure to include property management costs in your calculations.
While it may seem inviting to try and oversee your own investment property, it is more feasible to hire a professional property management company, such as Real Property Management Charleston, to do it for you; especially if it’s a first for you. Examine all the details and do your due diligence, especially with monthly fees and other costs. Don’t forget to add these to your budget.
In making use of these qualities, you will be able to examine and consider which properties make for good investments.
The next rental home is waiting for you. All that’s left is for someone to help you manage it! Real Property Management Charleston is here to help! Contact us online or give us a call at 843-900-4061.