Are you looking at purchasing an investment property to rent out? You'll need to perform a thorough rental analysis.
Buying property and becoming a landlord isn't as easy as choosing the first house you find and getting a mortgage. If you're not careful, you could end up with a piece of property that doesn't make you enough money and causes headaches at every turn.
To avoid this scenario, you have to perform a rental analysis. Today we're going to discuss the ins and outs of rental analyses and help you find the best rental property for your needs. Keep reading and you'll be able to go through any investment property and determine the pros and cons before you buy.
Take a Look At The Neighborhood
The biggest factor that determines whether an investment property is going to be profitable is the neighborhood it's in. Buying in an undesirable neighborhood makes it harder to find long-term tenants, so you'll either have more vacancies or you'll have to charge less rent to attract tenants.
For example, if you buy in a quiet, family-oriented neighborhood with lots of amenities and good schools, you can charge more monthly rent. A home near a college will attract more students and you'll see a lot of turnover as a result.
Other things to look at would be the crime rate in the area, but also future development plans. A historically rough neighborhood that has lots of future developments gives you the chance to buy low and charge more rent as the area builds up.
A Thorough Inspection
It's always worth it to pay for a house inspection before you buy. Knowing how much work you're going to have to put into a house is crucial in determining your return on investment.
You never want to be blindsided by large-scale repairs on an investment property. Once renters come into the fold, there'll be wear and tear to deal with on regular basis, so having a well-maintained property can help a lot.
How Much Can You Charge?
Doing a good amount of research into other similar properties in the neighborhood will give you a lot of crucial information. The first thing is finding out how many other vacant properties there are in the area - more vacancies means lower rent prices.
You can also get right to brass tax and find out the average rental price for the neighborhood. This will give you a ballpark for how much you'll be able to charge. Then you factor that against the price of the home and get a sense of when you'll start making money.
Get Help With Your Rental Analysis
Look into all of these things and you'll get a good idea of whether you should purchase a particular investment property. As thorough as your rental analysis could be, no one understands the local rental market more than a good property manager.
At Cissell Management Company, we can give you a free rental price analysis for your Oxford, MS property. Property investment and management is a big job, so if you're new to the game, it can be really beneficial to bring a property management company on board.
Visit our site to learn more about our services and contact us when you're ready to find out how we can help you maximize your investment.
