How to Find Investment Properties
The potential for appreciation and profitability is one of the most important factors to consider. The general rule of thumb is that the monthly rent of a property should be at least 1% of its buying price. This means that you have to study the rent in the area, so you can estimate how much you should buy the property for.
Simple landscaping means less upkeep both for you and your renters. You can expect your tenants to mow the grass but not all of them will be interested in taking care of huge plant beds or plant flowers. It is best to just find property that has low maintenance landscaping.
Three or more bedrooms makes sense if the neighborhood has multiple people with children. It will be marketable to families and you will barely experience vacancies. Target three or more bedrooms. Remember, the more bedrooms the more the rent. If your budget is low, you can only buy homes that require some work.
Most of the homes you find will have out-of-style bathrooms, outdated kitchens, and other things that may need modern upgrades—and this is not that bad. You do not have to put in a new bathroom or kitchen, unless it is really necessary. You might need to make minor repairs such as new floors but nothing major. When looking to rent to families, the neighborhood matters just as much as the home.
Even after you find a nice neighborhood, be skeptical on the exact location of the home and the available amenities. It helps to find a property that is close to schools, parks, and shopping centers. When a home is this convenient, numerous people will be interested.
Generally speaking, for rental real estate, property taxes are set at 2% of the gross value of the property. When you understand the property tax laws of your state, you do not have to guess the amount of taxes to pay. However, check the gross assessed value of the property before buying. The assessments are prone to being incorrect and you do not want any surprises later on.
How you maintain a property will have a huge impact on the costs of future upkeep. You can always tell when a home has had little or no upkeep for a long time. When conducting your search, look for homes that have been cared for to avoid huge repair bills in future. Houses with a brick exterior are easier to maintain than those with steel sliding.
A low-maintenance exterior will not require replacing—something that may cost you a lot of money. The biggest mistake you can make is to ignore a water problem, like a small pool in the backyard, because it does not seem serious. When you move in or turn the property into a rental, the problem is likely to get worse. Any trace of a water problem should be taken seriously. Make sure the drainage is excellent.
