Investing in an income generating rental properties is attainable only if landlords put certain considerations in mind before closing a deal.
Rental properties are a double-edged sword that can either make you one of the wealthiest investors alive or break your bank.
From handling difficult tenants and addressing their complaints to handling all that is related to repairs and maintenance, owning a rental property is a daunting responsibility.
This is why choosing income generating rental properties is what will make this entire process worthwhile.
Below we give you the 7 things to look for when investing in income generating rental properties
The neighborhood where your rental lies in has to say a lot about its potential of becoming a profitable investment.
Tenants are now aware what qualifies as a good and appealing neighbourhood or not.
Hence, by choosing an attractive location that lies in a safe neighborhood and near all schools, hospitals and shopping malls won’t only guarantee you a quality tenant, but also lessen your rental chances of staying vacant for long periods of time.
Investing in a property that lies in a mixed-used development where tenants have exclusive access to all sorts of facilities such as gym, sauna, Jacuzzi…etc will increase your property’s chances of staying busy all year round.
However, choosing to invest in a property that lies far away from anywhere that matters to your tenants will lessen those chances.
Everything comes with a price and investing in a property that comes with amenities and benefits to your tenants will cost you much but you will soon reap the rewards afterwards.
3- Rental rates
You need to be aware of the average rental rates in the neighborhood of your rental so as not to ask way too much or way too less.
Also, knowing the rental rates will help you determine if the property you are eyeing will generate enough income to cover your mortgage and maintenance expenses or not.
After all, you don’t want to invest in a rental that is obviously an alligator property.
4- Total Number of Listings
When the number of listings increases in a specific neighborhood, then that is a sign of high vacancy rates.
A high vacancy rate could indicate a problem with the neighbourhood itself, like high crime rates.
If you are unable to know the exact number of listings in your neighborhood to determine whether or not the area has a high vacancy rate, a good indicator would be low rental rates.
If the neighborhood rental rates are lower than average; then chances are that this area has high vacancy rates.
5- High Growth Rates
Upcoming developments in the neighborhood of your rental whether commercial or residential are all signs that your area’s future is a promising one.
Check for any new developments in your neighbourhood and if you find many developments on the way, then that is a sign that your area has a high growth rate.
Buying a rental in such areas will be a wise and successful investment that generates income for many years to come.
6- Job Opportunities
When you invest in a rental that lies close to a growing job market, you are increasing your rental’s chances of getting rented.
Many employees especially expats prefer to rent houses that lie close to their place of work.
Which is why it is advisable to do your research about the job market in the area you are interested before you close the deal.
7- Condition Checklist
Be a savvy investor and do the needed inspections before you close the deal to make sure your rental fits the condition checklist.
And by that, we mean that the property is in good condition and ready to be rented at once.
A property’s condition can make or break any deal.
Purchasing a property in a poor condition will cost you a lot to repair and you will end up paying twice your rental income to fix the damage.