One of the best way to increase your asset is buying properties for rent. But then again, being able to choose the best rental property to buy will be a challenge on your part. Here’s a list of factors that needs to be put into consideration before you look for a rental property to buy;
The Locality – people often don’t like being alone so you should pick a rental property on sale that is not located far from civilization Rental properties often acquire more customers on urban areas where there are lots of customers. The type of ad you are going to make in advertising your property for rent is also determined by the location of the property and they should be put to a location often viewed by people.
Also consider the tenants that you are hiring, since tenants most of the time wants to live in neighborhoods where everything is within reach. Most of them wants to live near work, hospitals, stores, schools, and other amenities.
A desirable neighborhood could greatly promote your property moreso if it is located near grocery stores and establishments where people can get their everyday needs.
Be aware of the numbers – The numbers is the first factor that you need to be aware of in buying rental properties. Checking the property expenses and being able to cross reference them with the potential cash flow of the rental property would be a wise thing to do.
There are a lot of factors that you need to put into consideration when listing out the expenses of the property and be sure to include in it the amortization of the property including tenant salaries and repair costs.
This is mostly a 20 year project to begin with but most of the expected results should be seen within the mid period. A good expense-income balance sheet should help you out in observing the progress of the business. Monitoring these expenses can prove to be a life saver.
A one month turn over period will annually vacate your unit as this is expected in the business. Within the one month turn over period, you should be able to clean and advertise your unit already for it to be ready in the next order of business. Only eleven month is counted as the profitable months of the year.
Low Maintenance – When buying a property for rent, you should choose the property that does not require you more expenses to maintain. Buildings that are made from low cost but durable materials are examples of these low maintenance buildings.
Having a calculation of future maintenance needs of the property is important for you to determine as early as possible if this could really be an asset or a new liability to you. Bear in mind that a low maintenance cost means a large profit and less problems.