Having disposable income from rental property investments adds to your financial security as well other uses such as fun or entertainment. However, investments like rental properties have risks. There are also factors that can impact how much money you make on your investment.
Below are top 5 things that could sabotage your rental property investment:
Location matters in real estate. Families for example want homes that are located near good schools, restaurants and grocery shops. Workers and most single people prefer houses or apartments near their work or with easy access to public transportation. If you want to make money from your rental investment, your property should be located in an area where people would want to live.
Unlike other types of businesses, you can’t move a home. Buying a house or property in a good location makes it a good investment. Before investing in a property, check out the neighborhood. It should be safe, have good schools, convenient access to restaurants and shops, public transit and freeways.
Property owners who are looking to rent their homes should also make sure that it is in good condition. Maintenance should be a priority because you want your rental property to be rented continuously. Unkept properties have long holding times which can cost money.
Always make sure that your property is in good rental condition. Appliances need to be in good working condition, paint should be refreshed after a tenant moves out, floors and roofs should be inspected regularly and broken fixtures should be repaired. You want a property that is ready to move in to attract tenants and shorten your hold time.
Sometimes it’s not the house or the location that’s the problem. In some instances it could also be the environment. Find out if there any environmental concerns relating to the area such as sewage treatment plants or refinery plants. These type of treatments plants could emit gasses in the area or be a health concern for some. We know that nobody would want to live in an area that stinks or is a health concern. Do your research about the neighborhood and know about its businesses to avoid such mistakes
A high rent price could be one of the reasons why your property is not being rented. Prospective tenants want something that is within their budget. They want an apartment that is conveniently located to their school or work but want something that they can afford.
Landlords on the other hand want a rent price that will cover their expenses including holding time, maintenance, taxes and other overhead expenses.
Try to find a middle ground between the market and your overhead. Doing research on similar sized properties in the neighborhood will give you an idea of the price properties are being rented in that location.
In markets like San Francisco, a shoebox sized apartment can fetch thousands of dollars per month. However, not every city is like San Francisco so property owners have to price their rentals accordingly. Generally speaking, bigger apartments with more bathrooms are more expensive compared to studio apartments. One of the reasons why a rental is empty could be because it is priced too steeply for its size.
Becoming a landlord can be a good opportunity. However, it is also important to practice due diligence when it comes to strategies regarding your property investments. Always be willing to do research and learn from other investors so that your property can make your money work for you. Looking for more real estate tips like these? Learn more here.
Before jumping into rental property investments it is also a good idea to determine your long term goals and if you are willing to take on the responsibility of being a landlord. Learn more here.