Finding the Best Real Estate for Your Money

By
Real Estate Agent

The purchase of your first rental property can be both exciting and scary at the same time. And the process between preparing to buy the property to the actual purchase can be a daunting experience. There are a lot of pitfalls that you can encounter when buying your first rental property, after all.

The first thing that you should decide when you are thinking of buying a rental property is if you want to actively manage it (landlord) or if you want to hire a management company to do the work for you. Managing it on your own can limit your search as you need to be within the vicinity of your property so that you can manage it. Hiring a property management company can lift this constraint, but with additional costs, of course.

There are a few things that you need to think about before buying your first rental property so that you can buy the best property.

Location

When buying your rental property, keep in mind the location where you want to buy the property as this will affect the type of tenants that you will have. For example, if you buy a rental property near a university, expect that your tenants will be students, and that you will face vacancies on a fairly regular basis.

Crime

Nobody wants to live in a place that looks like a scene from CSI. Check out the crime rates online rather than asking the homeowner who wants to sell the house to you. Also ask for police presence estimations in your area.

Employment Rates

Areas with high employment opportunities can attract people, and this translates to potential tenants for you. To find out this information, check out the US Bureau of Labor statistics for this data.

Amenities

Take a look at the neighborhoods' current or projected parks, malls, gyms, movie theaters, public transport hubs and other things that attract renters. You can check out the city’s literature which often have this information and more.

Price of Rent

Rent will be the lifeblood for your rental property, so make sure that you know what the average rent of the area is. Check that it is enough to cover your mortgage, payment, taxes and other expenses. If it is not enough, then it’s probably best to look at other areas. Look at where the area is heading for the next five years. This is important because you might be making money now, but if the area goes bad, then it can mean bankruptcy later on.

 

If you're looking for a new area to get into and are looking to invest in a nicer property, you might want to consider looking for homes for sale in Scottsdale, AZ or the surrounding areas. Scottsdale is a fantastic area that never goes out of style, after all!

 

Comments (5)

Sam Shueh
(408) 425-1601 - San Jose, CA
mba, cdpe, reopro, pe

The investor looks at cash flow, cap rate and vacancy rate.

 

Aug 06, 2015 11:06 AM
Sam Shueh
(408) 425-1601 - San Jose, CA
mba, cdpe, reopro, pe

One more measurement

gross rent multiplier.

You can be in best nighborhood you want. One will not run cash flow negative. 

Rarely one looks after appreciation for multifamily

For single family home. location, size matters. One rarely can break even with a low downpayment.

Aug 06, 2015 11:13 AM
Mike Rock
Complete Design - Granite Bay, CA
Granite Bay Luxury New Construction...For Less

price of rent  is important, condition of the upkeep is importance in terms of maintenance

Aug 06, 2015 11:21 AM
Ginger Harper
Coldwell Banker Sea Coast Advantage~ Ginger Harper Real Estate Team - Southport, NC
Your Southport~Oak Island Agent~Brunswick County!

For me, it has always been ...Location, location..location..

Aug 06, 2015 11:22 AM
Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

I have to say that in the age of the Internet this is probably easier than it ever has been in the history of the business.

Aug 18, 2015 03:54 PM