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Finding Great Rental Properties
Flipping distressed rental properties isn’t the only way to make a profit from the real estate industry. We’ve already talked about REO properties, but there are more. Investors without the standard real estate license have been creatively earning income by buying homes in ideal locations for years. While some of these homes are sold after gaining considerable equity, investors often choose these homes as prime rentals to earn monthly income. Rental properties have become a great financial resource for expert investors willing to risk for reward.
By definition, rentals are properties advertised and designed to receive rent from occupants. Like homeowners, these tenants make monthly payments to occupy or use the property as if it was their own. Though rentals can be either commercial or residential, the latter offers greater income for less capital and is ideal for single investors. With the enumerable tax breaks offered to landlords, owning a rental property is a smart long term investment.
The job of the landlord begins when making the initial decision to invest. Buying rental properties is a more complex process than the traditional home sale and requires more expertise and firsthand experience. This task may be daunting for new investors but isn’t impossible. For the most return on investment, finding rental properties to buy is an essential first step to your personal success as a landlord.
The Appeal of Rental Properties
Rentals offer major benefits to investors willing to spend the time, capital, and effort. Arguably, the biggest benefit of buying a property to rent out is the steady stream of income. With the right home, tenants will happily send monthly rent checks that will not only cover the mortgage but also offset any accrued expenses. Rental owners are able to deposit these checks into their business accounts and, after paying overhead costs, assume the rest as direct income. Within a year, those monthly checks pile into a surplus of thousands of dollars; it’s hard to argue with the financial stability rentals provide.
In addition, rentals also offer increased resale value. Purchasing a property in a desirable location will allow landlords to gain property value without making major upgrades. In turn, they’ll be able to sell the home for a considerable profit in the future. To ensure a profit gain at sale, make sure to buy a property with curb appeal in a high traffic area. Amenities and area expansion are always great items to add to the must-have list.
If a landlord wants to guarantee the most rent for his property, he needs to invest in sweat equity. This is earned by adding additional value to the home through upgrades and cosmetic changes. A fresh coat of paint, landscaping overhaul, and new appliances allow the landlord to request a higher rent from new tenants. It also increases the overall value of the house, in case the owner wants to sell. Home improvement projects attract both higher paying tenants and buyers, a goal rental owners should constantly strive to accomplish.
House Hunting for Rental Properties
After an individual decides to invest in rental properties, their first step is to find the property that will make the most sense to meet their financial goals. While on the prowl for the right home, an investor might stumble upon various viable properties in their area. With several options, it might be difficult to decide which property will make the best choice and most money. Before making an offer, investors must consider several factors when determining good rental properties.
Location is key to finding the great rental. Choosing the right rental properties for an investor, they must first decide whether they want to actively manage the property as a landlord or share that burden with a management company. If an investor intends on becoming a landlord, they must restrict their property’s location perimeters to check on the home’s condition. However, if they wish to hire outside help, it’ll eat at monthly income dividends. Both options are viable; it is up to the investor to decide their level of involvement in the rental process.
Location is also vital to attracting the ideal tenants. Investors need to find a home that will consistently have tenants competing for the chance to rent. Affluent areas near booming businesses will attract middle-class families seeking stability, whereas neighborhoods near universities will attract students needing short term housing. Before purchasing a property, it’s wise to have a target tenant in mind and appeal to them.
Many families consider the surrounding schools before renting. If your potential tenants include families, finding a home in close proximity to a decent school is a must. The quality of a school system can be easily found online before buying. Public education directly impacts the value of your investment, so steer clear of poor performing schools.
Crime rates also affect a rental property’s value and should be researched before signing the purchase agreement. Renters want to feel safe in the property they choose to call home, and a hot spot for criminal activity can drive away respectable renters. Many counties post accurate crime statistics online, but these figures can also be gathered at the police station or the public library. Look out for vandalism rates, petty crimes, and general activity growth to ensure you’re buying a rental property in a low crime area. Not only will low crime rates boost the projected rent, they’ll also guarantee a lower probability of property damage.
Great rental properties will reside in an area with continued job growth. Varied employment opportunities tend to appeal to more people, creating a larger pool of potential tenants. High employment rates also indicate a healthy local economy, which is great news for landlords seeking financially stable renters. To assess the current job market in a specific area, search the U.S. Bureau of Labor Statistics site or keep an eye on the local newspaper.
The last factor that will help determine a great rental is the inclusion of amenities. These come in various packages and include parks, shopping malls, entertainment venues, and public transit. If your property lies within walking distance of an amenity, tenants with interest will pay more to rent. The amenities that surround your rental home will help define both the property and the tenants willing to rent it. Advertising the amenities offered will assist in earning the biggest monthly checks.
Want to Buy or Sell Your Rental Properties?
Buying and selling rental properties is simple if you go through wholesale real estate investors. These properties are ready to go, and are usually much cheaper than market prices for similarly valued houses.
At Roddy Offers Buys Houses, we specialize in wholesaling houses. Our properties are perfect for people looking into becoming landlords, or anyone interested in starting a real estate investing business. Have a rental property you want to sell? We take care of that too! Contact us today at 469-406-6961, we’d love to talk to you! You can also become a member of our buyer list so that you can get exclusive contact when we have a property to sell. We look forward to doing business with you!