If you’ve been thinking about investing in real estate to rent, there are a number of questions that you should be asking. Perhaps you’ve just happened upon that perfect property, maybe you’re just thinking about where you’ll look: either way, there are a number of things to consider.
What’s the supply and demand of the area like?
One of the things I notice is that many of RentPosts’ clients are college property management firms. They can tell you that, if you decide to go with the college town environment: the turn over is pretty high, but, there are advantages to those renters.
If you find a rental unit that is a home and it’s somewhere in the lower or middle range price, you will find that they can be fantastic in terms of being profitable, because they’re sought after most. People like living in their own space.
These are just two potential situations you’ll find. For as many different demographics of people as there are, there are unique demands of those markets.
Would the city or rural area be best for me?
This is one that many don’t really think about a whole lot, but it’s one that ties both advantages and disadvantages together well. You can usually find bigger properties at a lower price in rural areas, but with that, you also may have added maintenance issues.
In the city, however, one of the issues you frequently run into is that though the price of the property may be higher- the ability of those renting it to pay a profitable rent may not be. It’s something to be careful of when you’re looking at rental investing.
What if I want to buy a home for myself, and then rent it out while buying one to live in?
This one also sometimes happens because people want to buy a new home, yet are worried about being able to sell their previous one quickly or at all. There are benefits to this that you can usually find even at the loan stage of the first purchase- and certainly, when you’re a first time buyer, there are.
However, if you’re thinking about doing it in terms of being able to rent out a property because you worry about being able to sell it: you may want to be careful. There’s a lot more to it, legally, financially, and otherwise that many do not consider when this first looks like a good idea. It’s probably best to discuss those things with someone who has experience as a landlord or property manager- because they can tell you everything you need to know about what you plan to do.