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Investing in real estate can be a viable source of supplemental income. Whether it is renting out a space in your house or purchasing a space to rent out, an income property can be a lot of work, especially if it is your first time. In terms of purchasing a rental property, there are key features than can yield a profitable return. Likewise, there are key features that can cause your property to be a money pit. To avoid the latter, here are seven things you should keep an eye out for when looking to purchase an income property:
The location of your rental property is key to its success. Before purchasing a home, check out the quality of the neighborhood as you would if you were planning to live in the space. Take a look at the neighborhood during different times of the day to see what type of crowd it attracts. Does the neighborhood seem family-friendly? Is it a busy street? Are there a lot of foreclosures on the street? All of these questions can help determine whether or not the neighborhood is worth the investment.
Many communities have amenities included, such as a community pool, community tennis courts, a clubhouse with http://www.tvproviders.com/ to watch the big game, and even a daycare center. While these neighborhoods tend to be pricier and usually have an HOA attached to them, they can attract quality renters who are looking for a good home.
3. Property Taxes
Property tax is something to keep in mind, as you will lose some of your income to taxes. High property taxes can be detrimental to your supplemental income, thus it is a wise idea to speak with the city’s assessment office in order to get an idea on the tax information.
In case your tenants have children or are considering children, look for a house near a decent school district. This is not only attractive to potential renters; this also can add value to your income property. Schools with a bad reputation can have a negative affect on your property, causing the value to decrease dramatically.
Check crime statistics before purchasing a rental property. Homes in a high-crime area will have a hard time maintaining their value, as it will limit the amount of people interested in the home. Speak with the local police about the crime in the area, and keep an eye out for visible vandalism and whether or not there are bars on business windows.
Homes in a locating that has growing employment opportunities are more valuable. The U.S. Bureau of Labor Statistics should have the employment rates for any given area on record.
Be sure to check out the average rate rent is going for in the area you are looking to buy a home in. If the average price will not cover the mortgage payments, taxes, and utilities of the home, look elsewhere for a rental property.
These seven tips should aid in your ability to invest in a profitable rental home.