Some people think research ends when you graduate from school, but in reality we carry those research skills through every part of our lives, and if you're a landlord you will really need to sharpen those skills to work for you. If you're investing in your own area or a place you've already invested in before, you may already have a great deal of the research and reconnaissance work done when ahead of time and not even realize you've done it. This helps save time and is often one of the reasons people enjoy investing in places that they're familiar with.
It would be so much easier if, as an investor and a future landlord of the property you plan to buy, you could simply choose one that looks nice and buy, but we all know that it's not that easy. So much more goes into an investment than a first glance. You'll need to know the surrounding area, local rent rates, laws, and much more. Researching and finding these details before
buying the property will help you when you are deciding if the numbers line up for that particular investment so that you will walk away with a profit.Know the area.
When you set out to buy a new property to rent out, the first thing you'll want to know is the area. Certain areas will, for the most part, attract certain tenants. If you live in the city or town you're investing in, you'll likely have a pretty good idea which parts of town will attract the types of tenants that you're looking for, but if not you may want to reach out to someone who knows the area for advice. Check with a local Realtor in that area. He or she may know of a good deal on a property in a section of town that's about to be redone to attract new people to it. If you get in on the ground floor, you could find a great investment opportunity.Know what is where.
Part of successful marketing for a rental property is being able to highlight all the best features of that property. That is not limited to just what you own. Many renters today choose their next home at least in part due to the location. Are there restaurants close by? How well ranked is the school district? Can your future tenants walk to various stores and entertainment venues or are they close to public transportation? All of these are great aspects to highlight when you're marketing the property (though make sure not to word it so that it looks like you're discriminating against one group or another), and knowing it ahead of time helps you know what you have at your disposal.Know what others are charging.
If you have other properties in the area already, you likely know what other landlords are charging for their rentals. Price is a big factor when a potential tenant is searching for their next home to rent. If you don't bother to check in and see what the average rent is for other properties like your own in the area, you can bet that they will. If you price yours too high, they'll look elsewhere, but if you price it too low you may risk someone reporting your online listing as a scam and the listing site may take it offline, putting you back even further in your search to find your next tenant.Know the local laws.
While some landlord-tenant laws are federal and pertain to rentals across the country, many laws are local. If you have never invested in a property in the city/town you're looking to invest in, you'll want to make sure to look into the local laws. Some of these could be state, county, or even city laws that will dictate different aspects of the landlord-tenant relationship. Beyond even that, if you invest in a housing community or a condo, the community may have an HOA that will limit certain aspects of your rental as well. Not knowing is never a valid excuse, so make sure you leave no stone unturned so that you can make sure to avoid potential fines or legal troubles.
Research does not have to be limited to online searches and law books. Check with local landlords and landlord associations for tips and personal experiences in the area that you plan to invest in. You're not alone, and often other landlords will be happy to help you avoid mistakes that they have made in their own business. Check out online communities
like the one Landlord Station provides as well to connect to landlords and property managers all over the country.