First you have to buy at the right price. What is the cost of the property? How much is it going to take to get it ready to rent? What is the realistic expectation of monthly rent? Don't borrow mony to buy a rental property that you must have the rent check every month to cover the payment. You will be empty from time to time and you will have repairs from time to time. If you can't afford to cover those expences you need to hold off or buy a less expensive property so you can cover unexpected cost and a little down time.
Just as important is you buy a property that will attract a quality tenant. A quality tenant is one that pays on time, keeps the property clean and does not damage the property. If you have a run down property or a property in a bad area you will have a hard time finding the type of tenant you want.
You need to know what the demand for rent is in that area. For example we have The University of North Georgia in Dahlonega. You want your rental to be within 10 minutes of the college in an area that appeals to the students and their mom and dads who are footing the bill. If there is a factory or mall that employees a lot of people that rent find a property that is convenient for them to go to work.
Keep the property in good repair. If you don't you can't keep good tenants. If the market is not hot for rentals price yours a little below market rate, you will end up better off in the long run. If the market rate is $1000 per month for similar property's and there are several available price yours at $900. There is a good chance yours will rent first. If you kept the rent at $1000 and it takes you two extra months to rent it it is unlikely the tenant will stay long enough to repay the $1800 you got the first two months. You also have a greater risk of getting vandalized at a vacant property.
Do a credit and background check on the tenants. You don't want somebody that has never paid anybody on time. You can be understanding if somebody got sick or hurt and has medical bills or somebody lost a job during the downturn and had to take a lesser paying job. They may have lost a house to foreclosure. You can still look at the credit and it has been good up to the event that got them behind they will most likely do everything they can to rebuild their credit. There are a lot of really good people that will make excellent tenants that went through a hard time during the recession. If your applicant has never paid anybody on time and everybody and their brother has a lean filed on them you don't want them.
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