With so many recent changes in the mortgage industry - I have had lots of interest in the rental market. The biggest question: Is now a good time to invest in rental properties? My answer... It's always a good time to invest in Real Estate. Now of course, not every deal is a good deal... So, what should you look for when investing in Real Estate?
1. LOCATION, LOCATION, LOCATION! A heavily traveled area can make properties easier to find. Being close to amenities, employers and airports makes it a great location to live and will usually rent faster.
2. More expensive homes. Expensive homes drive rental prices. What do people do when they can't afford to buy? they rent.
3. Low maintenance properties. Properties that have cedar shake or tile roofs, pools, etc. scream high maintenance. Lower maintenance means higher profits.
4. ALWAYS figure in your expenses. If the property doesn't rent immediately you will be responsible for mortgage payments and utilities. Don't forget taxes and homeowners dues as well. Make sure that your monthly re
ntal income will include your outgoing expenses, plus some for needed repairs.
5. Check the rental history if available for the property. How long on average do residents stay, and do they pay their rents on time? Background Checks are always a great expense as well. Make sure you know who is living in your home.
6. Buying rental properties with below-market rents is a sure wealth builder. It means you get to raise rents, and that means you immediately raise the value, because rental property values are based on income.
7. Pay attention to fire codes and zoning. Not such an issue in this market but it doesn't hurt to have the property inspected, so that you know if there happen to be anyexisting problems.
8. Newer homes are usually lower maintenance and higher in demand among tenants.
9.If the Owner is an out of state owner he/she is probably selling because it can be a real headache to manage a property from far away. Out-of-state sellers are often more concerned with a quick sale than a high price.
10. Size Matters. In a market that caters to mostly families, make sure you offer what families are looking for. But having the largest home available doesn't necessarily attract the best renters either. It can mean more upkeep for a single tenant or smaller family.
So this list should get you started, but as you begin to look at properties you will certainly be able to add to this list. Go with your gut, and most importantly - Hire a Real Estate Professional that knows your rental market!
For Information on buying investment property in Denton County, contact Leigh Bates at 972-899-3282. You can also email Leigh or visit http://www.leighbates.com. We look forward to hearing from you!
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