3 Things You Must Know Before Purchasing Investment Rental Properties
Posted on: 15 November 2019
Are you thinking about investing in real estate? Have you been thinking that being a landlord will lead you down the path to early retirement? While there are no guarantees in life, purchasing houses and/or apartments can be a great way to make extra money without having to put in even more hours at work. But for your investments to pay off, you'll need to be purchasing the best properties that you can. Since this is something that can vary from state to state and even between different cities, here are some things to take into account:
School district
It's pretty much inevitable that at least some of your tenants are going have kids that are or will be going to school soon. When looking at residential real estate listings, it's a good idea to find out exactly which school district the property is located in. If the residents would be sending their children to better-performing schools, you'll typically be able to command higher prices for rent than if your property is located within a poor school district. This often also means that you'll get better quality tenants who are going to be less of a hassle for you and/or your property manager.
History
When looking at residential real estate listings, you should be able to see how often it has passed to new owners and how much it sold for each time. A property that keeps getting sold on to new buyers is less likely to be a good investment than one that has been relatively stable for at least a few years. On the other hand, if you think that you can easily renovate an otherwise-undesirable property and either sell it on yourself for a profit or start charging more rent, this can also be a good investment. When in doubt, consult with a professional who will be able to help you with your assessment.
Current occupancy
Before you buy any property for investment, it's a good idea to find out what the current occupancy status is. When buying a home, find out if the current tenants have a lease and what terms you'll have to keep. When buying an apartment complex, you need to find out what percentage of the units have people living in them right now. Sometimes, this information will be in the residential real estate listings themselves but you'll probably have to get your real estate agent to ask the seller for that information.
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