Wednesday, March 27, 2013

5 Factors to Consider Before Investing in Rental Homes

Investing in rental homes is one of the best financial decisions one can make. Being such a major investment, you should not rely entirely on your judgment alone. However, seeking the help of an agent can put you under pressure to buy a property that does not really suit you when you want to search some more. You will need to have an unbiased approach towards any property and neighborhood that is within the range of your budget. This will be determined by whether you intend to personally manage the property yourself (to be a landlord) or you intend to hire a management company because of the factor of proximity.

Here are some of the factors you will need to consider in your search for a rental property:

Neighborhoods
The location of the property determines the quality of the neighborhood, which determines the types of tenants to expect as well as how often you should expect vacancies. For instance, a property located near a university will attract tenants who are students and there will be regular vacancies during vacations.

Schools
Some of your tenants may be families with school-going children. If these are the type of tenants you want, you need to look for a place that is near a decent school. This means you will have to check the quality of the nearby school, because it will have a bearing on the value of the investment, as well as the length of time tenants live in the property. Families with school-going children are generally long-term tenants and are the great for your rental homes.

Property Taxes
You need to find out from the town's assessment office all the tax information, and also speak to other homeowners within that community to learn more. High taxes should go hand in hand with an excellent neighborhood and long-term tenants, but this does not always happen. This may affect the value of your investment.

Crime
Do your research on accurate crime statistics of the neighborhoods that you target. You can get all the information you need from the police or the public library. Vandalism rates, petty crimes, serious crimes, as well as recent activity (in terms of growth) are items to look for.

Jobs
Growing employment opportunities in locations are an attractive feature of any town. The local library can provide that information. The arrival of a major company would also mean an influx of workers in the area.

These are just a few of the factors that you need to consider if you want to invest in rental homes.

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