The “perfect” property might be more of a myth than reality. However finding the right investment that checks off your list can prevent you from turning a money maker into a money pit.
Network with property-savvy experts
- Start a conversation with your social media connections, or meet up for a cup of coffee to discuss their latest findings. These contacts could provide insight and advice tailored specifically to your area, like leads on local properties.
- It’s important to research your location of interest, such as crime rate, job market, and other demographics. Make sure you don’t forget key factors like vacancy rates, average rent, popular amenities, and walkability to shopping or nearby attractions.
Set your sights on your ideal renter
- Purchasing properties in suitable areas will help ensure desirable renters. It’s always a good idea to visit the neighborhood in person before any major purchase.
- Finding a property that is adapted to the character of the neighborhood will also help draw in the renters you’ve envisioned. For example, purchasing an investment property in an area filled with young working professionals might better suit your needs as opposed to an area with college students, depending on your goals.
Fixer-uppers are high risk
- Avoid depleting your investment return on properties that require core work, such as piping and electrical.
- Keep an eye out for hidden costs and fees.
Monthly earnings matter
- Before purchasing a property that is currently leased, obtain the rental history from the owner and compare their rates to area comps.
- When researching previously owner-occupied properties, use other resources for rentals that are similar in size, amenities, and location. Use that knowledge to help guide your rent rates.
- Research red flags for nearby landlords who are struggling to find renters. You might find that their listings waive credit or background checks.