Whether you're new to the game or looking to add additional properties to your portfolio, undoubtedly you want to invest in property that will provide a solid return. One way to ensure this result is to research the community in which you'd like to buy property. By choosing property in an area with potential, you can take your business to the next level.
Learn about Local Rental Regulations
As you search for investment properties, you want to be clear on local government standards for rental homes. Most cities and towns regard rental properties more like a business than a residence. Thus, for instance, a certain township may state that for a room to be considered a bedroom, it must be at least 100 square feet. So, if you're looking at a three-bedroom Victorian with one bedroom that's only 11x8 feet, then you will be only allowed to advertise that house as a two-bedroom, which will to decrease the rental price.
Stick to the General Rules for Choosing an Investment Property
Features of the property's surrounding area could make the home a good or bad investment; look at crime rates, employment statistics, local amenities, quality of schools, number of vacancies, and trends in housing prices, among other factors. Also, research the community's ongoing developments. If new businesses, public transit lines, and/or shops are opening up, those are good signs of a thriving community.
Look for Hazards That Could Cause Bad and Costly Accidents
One lawsuit can make any rental home a big loss. Always check for mold, lead paint, radon, and asbestos prior to buying. Other safety concerns, such as uneven sidewalks, open electrical circuits, obstructed doorways, and steep steps should be considered. Of course, there's no way to 100-percent safeguard a property from a potential accident, but you should make sure you're properly insured. Also, establishing your property as a limited liability company (LLC) can limit your personal liability.
Put Utilities in the Tenants' Names
Know that if the utility bill is in your name, but the tenants pay the bill each month, you are still legally liable to pay it—even if the tenants stop paying. And you must still provide them those utilities. The best choice is to put the bill in their name so that they're legally liable to pay.
Is the Big Lawn Worth It?
A house on an acre of land may be easy to rent out, but you'll be paying to maintain the lawn, unless you can reach an agreement with the tenant. Also, that extra space is going to equal higher property taxes. Financially speaking, you're probably better off looking for properties that don't have a ton of land.
Be Clear on What Your Tenants Want
Research to see if amenities desirable to your target market are available nearby. Young professionals may want a local social scene and trendy dining establishments while older residents might want to know about the availability of health care nearby. Young families might want parks and other fun spots for children. And when you go to advertise, tout these nearby amenities.
Comprehensive credit & criminal screening.
Get access to bankruptcies, employment history, medical records, past addresses, evictions and more.
State-specific legal forms.
Lease agreements, rental applications, lease termination, eviction forms and much more.
Our paid membership plans now include free tenant screenings! Greater access to all of our features and the membership pays for itself!
© Copyright 2016 LandlordStation LLC