10 Things to Look for When Investing in a Home
For first-time investment property owners, it can be a challenge knowing what to look for as you select your property. While you can definitely rely on a knowledgeable real estate agent to help you narrow down your search, there are a few things you should already be aware of.
1. Property Taxes
Because you will still be responsible for the property taxes of your property, it is a good idea to have a general ballpark figure of what they will amount to. Will you be handling the management of your property on your own or will you be using a property management company like Real Property Management Pinnacle Tucson Tucson? This can and will make an impact on how successful your rental property will be. Using a professional management team can help ensure your property stays rented for longer periods of time, which greatly increases its profitability. Additionally, a professional property management company ensure that you are complying with the various laws that go along with owning a rental property.
When your goal is to attract quality tenants, you want to be sure you’re choosing a home in a quality neighborhood. The neighborhood your rental property is in will most likely have an impact on frequently you will have vacancies. There are some strategies that can work to your advantage when you leverage the condition of a home and the neighborhood it is in.
3. Crime Rates
Some tenants will be paying close attention to statistics such as crime rates as they choose a home to rent. You can find out what the crime activity is like for the different neighborhoods where you are looking to buy by checking with the police or at a public library. Specifically, find out about vandalism rates, serious crimes, petty crimes and whether these rates are increasing or decreasing.
4. School District
You can bet that tenants with children will be checking out the school district where your home is and comparing it to others on their list. Additionally, the quality of the schools near your home can impact the value of your property. This may come into play when you get to a point of selling the property someday.
It is definitely worth the time to learn more about nearby amenities. Find out about not only existing, but also projected parks, gyms, movie theaters, malls and public transportation. These are the types of perks that can attract renters.
6. Current Listings and Vacancies
If the neighborhood or community you are looking in has an unusually high number of listings or vacant rentals, it could be an indication of a bad neighborhood. Some neighborhoods are seasonal by nature, which is also something you will want to know. Be wary of a high number of rental vacancies. This could lead to having to lower rent rates to attract renters.
You might take a few minutes to check the U.S. Bureau of Labor Statistics’ website to learn more about employment opportunities in the areas you are looking in. A home in a location with growing job openings is much more attractive to potential renters.
8. Rent Rates
Since the monthly rent you collect will be your bread and butter with any rental property you own, it is a good idea to know what the average rent is. Knowing the average rent will help you know whether or not whether your mortgage payment, property taxes and other expenses will be covered or not. It’s a good idea to do the extra research to know how things might be changing over the next 5 to 10 years. Even though rent averages are good now, if it appears that things are declining, you might consider passing on that specific property.
9. Flooding History
There are other natural disasters to watch out for, but in the Tucson Arizona area, flooding is much more common than tornados or earthquakes. Knowing if the home you are looking at sits in an area known for flooding can help you determine what type of insurance you will need.
10. Self or Company Managed
Will you be handling the management of your property on your own or will you be using a property management company like Real Property Management Pinnacle Tucson Tucson? This can and will make an impact on how successful your rental property will be. Using a professional management team can help ensure your property stays rented for longer periods of time, which greatly increases its profitability.
For more questions about rental properties, call Real Property Management Pinnacle Tucson Tucson today at 520-883-7368.