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Owning a rental property can be a nerve racking venture especially for first-time landlords. The concept of the rental property might be simple, however, it is riddled with threats that can topple down your business before it even begins to flourish.
Your hard work begins right from when you first purchased your property. So before you take a leap, you should make sure that you are ready for any possible hurdles ahead. Most of all, you must ensure you choose a new property and property manager wisely.
Let us guide you on the things that you need to consider when choosing the right investment property.
How’s the neighbourhood?
If you are looking to target a particular demographic of tenants, you must also be particular with the kind of neighbourhood you want your property to be in. Remember, a good neighbourhood attracts good quality tenants.
Of course, this includes looking into the local crime rate. Go to the police to acquire accurate data that would give you a perfect view of the kind of neighbourhood the property is in. No one wants to live in constant fear of being robbed, right? You also have to look at the amenities that are in and around the area, such as schools and universities, transport, shopping centres and restaurants, as these would significantly affect the number of prospective tenants that you might have.
Are there schools nearby?
Choosing a property that is conveniently close to schools boosts up its chances of getting rented fairly quickly. Not only will you be attracting students, you’ll also be drawing lots of young families in, as well as couples planning to have children.
On the other hand, you still might need to do an assessment on the school’s reputation as it can considerably affect the rental rate and the price of the property should you decide on selling it.
How is the employment trend?
People are constantly drawn towards places where there is a great opportunity for career establishment and advancement. Be on the lookout for large companies opening or moving to the area.
What is the estimated weekly rent?
Obtaining a rental appraisal will give you a good insight on how your investment property will fare in the market. A rental appraisal will also be important to ensure you are aware of how much will be required to cover taxes, mortgage, as well as other costs such as maintenance.
Also do some research on your chosen suburb. How much progress will there be in the next 5 years? Will the cost of living grow drastically or will it stay relatively close to the current trend? Such factors would greatly affect the profitability of your property in the long run.
What is the vacancy rate?
The vacancy rate signals whether it is good to invest in a property in a particular area or not. The rise and fall of the vacancy rate might be subjective to a particular time of the year. A hike in the number of listings could mean one of two things. It could either be just a seasonal trend or it could simply mean that the area is just not marketable. It’s important that you know how to distinguish one from the other in order for you to make the right call.