If you are a first-time investor who doesn’t have any experience getting into the rental market, the whole process can seem extremely daunting. You want to make sure that you pick the right place that is going to generate a healthy return on your investment.
Investment property strategies vary depending who you speak to, but here, we are going to discuss a few simple factors that should influence your decision when choosing a rental property to invest in.
The type of neighborhood that you go for will very much influence the types of tenants that you get and the regularity that you will find vacancies in your property. For example, if you invest in an area which is dominated by students, it is likely that you will have a large group of possible tenants, but they will not stay for a long period of time. On the other hand, if you choose a family-dominated area, it is likely that they will move with much greater regularity.
You should be wary about investing in areas which have higher-than-normal crime rates. Not only could this put off potential tenants, you will also find that your property is more likely to get damaged or burgled. It is always worth finding out about crime statistics before investing.
People like to know that they have plenty of options to move around as and when they need to, so you should check out what sort of public transport and road links are available. If your property is within a commutable distance of the local town or city, you are more likely to attract all sorts of workers.
As well as the amenities that are available nearby to the property now, it is also worth checking out whether or not there is any future development planned in the future. If there are new apartment blocks, business parks and shopping centres planned, it is usually a sign of a good area for growth. On the flip side, watch out for any developments that could potentially damage property prices in the future.
It is important that you know what sort of rental prices are available in the local area. Not only will this tell you what sort of return on your investment you can expect to receive, it also tells you how popular the area is. If rent seems high to you but properties are still being snapped up quickly, this is usually a good sign.
Amenities, Schools and Job Opportunities
The three things listed above are right towards the top of the list of what renters are looking for, so it is worth investigating all three in more detail. Find out what sort of amenities and entertainment options are available nearby, as well as the quality of the local schools. Also, check out the prominent employers in the area to help you out when you are profiling potential tenants.