What should I look for in a rental property?
What characteristics should I consider when evaluating a leasing property?
I wasn’t clear in my question. I’d like to buy a property to rent. What should I look for?
Cash flow.
the rent
what kind of heating
what kind of locks is there one the doors and windows reckon of security
check for damp, and needed repairs
how much notice do you to give to leave
what are the neighbours like (for all you know you may possibly be moving next door to the meanest drug user in town
location..
neighborhood..
schools in area(if you have kids)
plumbing
roof
foundation
electric wiring
interior repairs needed
exterior repairs needed
ventillation
fire alarms
taxes paid per year
Depends on your situation. Some people look for cash flow, some look for tax breaks, some look for appreciation. You have to know why you want to buy this property and what you plot to do with it before you know what you need to evaluate.
Look for something that you would be able to comfortably afford if you get into a position where you have no tenants. You would want to get a decent sized home as well, something affordable and open for future tenants. Look at the home as something you would live in and make sure that it is in an area that a resale would be beneficial to you. Excellent luck with your investment.
As the General Manager of a large Mortgage Company and Real Estate office, I get this question on a weekly basis. I tend to have a different opinion that the other responders that previously answered your question.
Most people that own leasing properties today do NOT expect a significant source of income from those properties. That is, unless they have several properties, OR they own those properties free and clear. The general mindset today of leasing property owners is a simple one, Get a excellent buy, make sure the organize and appliances, as well as HVAC and electrical systems are stable. Then, let the renter pay the mortgage and thereby pay down the principle. Own the property for 3 – 7 years, then SELL!!!! By dependability so, you are not making a siginificant amount of profit or income on a monthly basis, but rather your windfall comes from the increase in the value of the home through general market APPRECIATION. That is, the amount a home increases in value as a result of the general market increase in the value of the home based on sales of similar homes in the same general area. The national mean appreciation rate is 5% +/-. Higher in some areas….lower in others. Look for homes in areas with appreciation rates superior than 5%. As an example…Sacramento, CA is seeing appreciation rates 10 – 20%. That means a $300K home will increase in value 30 – 60,000 in ONE YEAR!. As soon as you start seeing decreases in value…SELL!!! You can make a very healthy profit in earned equity even as your actual investment is nominal.