3 Things To Consider Before Investing In a Rental Property

Are you considering investing in a rental unit? It can be a great way to create additional income and even bring in money during retirement.

However, you don’t want to dive in financially without doing the necessary due diligence. It’s vital to ask key questions and make sure you have everything in place before you invest. Here are three things to consider before you get your first investment property.

Where Should You Purchase?

Some people get started by renting their own homes when they move to a new location. Although, most investors have to start by purchasing a property.

If you don’t purchase a rental in a desirable part of the city, you won’t be able to command much rent, and you might attract poor tenants. Think about the kind of tenants you want as well. Are you interested in renting to families, college students, or young professionals? Will you be able to manage? Is it possible to hire a Bellevue Property Management company to ensure that the property is maintained well and the tenants are sorted out well?

How Will You Find Great Tenants?

Screening for good tenants is a significant part of the work involved in having a rental property. Once you have a great property in a good area, you need to find folks that will live quietly, pay their rent on time, and generally be good neighbors.

Having a thorough rental application is the first step, and you also need to check credit ratings, job history, income, and contact previous landlords for references. If a potential renter doesn’t give you permission to check these things, then you’ll want to move on.

It might be easier for you – especially if you work full-time in your job – to hire a management company instead. This is especially true in a larger city like Philadelphia, where a property management company can help you avoid having to screen a large number of applicants yourself.

Do The Numbers Make Sense?

Finally, before you take the plunge and buy a property, make sure the numbers make sense for you financially so that you can make a good profit. You should be sure to compare the rental income to the mortgage, insurance, management fees, repairs, and property taxes that you have to pay.

If the property needs repairs before you can rent it, be sure to factor that in as well. Don’t spend a lot of time and money making it perfect, though. Instead, focus on the renovations and repairs that make the most difference to renters and help you command a better rate.

A Rental Property Can Be Great Income

Once you get started with a rental property, you will find that it provides a significant income and can be a reasonably hands-off experience however do not forget that time and work that needs putting in like getting your roofing done by a top class respectable roofer here, especially if you work with a good property management company. As you build up your profits, it may make sense to invest in additional rental units.

Just make sure you carefully consider each of these three points every time you plan to invest. You want to end up with a profitable investment, not a burden!