There are a lot of factors to consider when purchasing a rental property, so many in fact it can be overwhelming. But fret not, as we run down some of the features that make a rental investment outshine the competition.
The most important consideration in anything real-estate is what's comparable and close. Anyone considering your rental will take a drive through the neighborhood, or at least check the street view, to make sure it's somewhere they would like to live. The perfect property may exist in the perfectly wrong part of town and end up vacant constantly.
When considering a property it is best to get a feeling for the entirety of a neighborhood, drive around and go into local businesses to get an up-close and personal feeling. This way you know best how to market a property and if the neighborhood is the right fit for your business! If you're considering a larger property or multi-tenant property you may also want to consider school zones and the job market as factors in your location!
The close and comparable rule applies here as well. What is the average rent in the area? Will you be able to compete and maintain viability? If your price is higher than average does your property have features/amenities to make it stand out?
This is also where you may consider including things like water utility or internet with your price of rent to make your property stand out or compete with others doing the same in an area.
Be sure to research enough to get an idea of where rent prices will be going in the next few years as well. A property that is barely viable now may become unviable in the near future without proper planning!
This segues nicely into our next consideration, future development. When was the property you're considering built? And what does the development look like around the property? Getting into the right place at the right time can lead to huge success. Always consider the future of the entire community and any major developments near a property, more development and investment in a community generally leads to higher rent and more interest later on.
You are investing in a community as well, your property and business are a living part of it. So buying a rental property is your endorsement of an investment into a neighborhood.
Odds and Ends
Again, there are many many things to consider when buying a property. So many odds and ends will pop up and get your attention. It is the smart investor that considers all the aspects of a property and its surroundings before making a purchase.
Having a good plan is crucial to your business of course, but the research and footwork you put into that plan can color how you run your business for years to come. It informs all the aspects of your business and the role it plays in a community!