Investing in a rental property can be an effective way to secure your future. Although real estate can be a viable investment choice, it can also become a headache if you do not carefully choose your rental property. Picking a rental home is a similar process to selecting a home you plan to use a a residential property. Afterall, regardless of whether or not you buy the home as a rental property, you maintain ownership and responsibility of the home.
Research the rental market. It is important to select a desirable area not only for the rental property, but as a long-term investment. Choose a desirable area with a low number of foreclosures. You can ask your real estate agent for information on the market or look up specific regions online.
Select a location with a low crime rate. Areas with a low crime rate are more desirable and safer for your property and your tenants. You can look up regional crime rates online through government agency websites like the Federal Bureau of Investigation, or FBI, or your local police department.
Hire an inspector. A home that is not up to code can be hazardous to tenant's health and result in a lawsuit. Damage is not always visible to the eye. Avoid homes that have infrastructure issues, such as cracks is the foundation.
Calculate a fair asking price. Factor in your insurance policy and taxes to determine a price that will cover your expenses. Some states, for example, require that provide tenants with heat and hot water. Compare the rental rates for similar homes in the neighborhood to get an idea of how much you can charge.
Consider the cost of upkeep and maintenance. An older home may require more maintenance than a newer home, in some cases. If you are unable to do the work yourself, hiring a handyman can become costly. Stick with simple construction. For instance, a slate roof may be visually appealing, however replacement or repairs can be expensive.