To further expand your investment portfolio and get your money working for you, many people choose to purchase a piece of property that they then rent out to someone else and collect the money for. And while this might seem easy enough, ensuring that everything goes smoothly in this process can be a bit challenging.
To help you on this journey, here are three things to consider when purchasing a rental property from someone like Heidi Houston.
Find The Right Location To Buy
Once you’ve decided that you can afford to buy a rental property and are now on the search for the actual place to buy, it’s vital that you find the right location to make your purchase.
According to Tim Parker, a contributor to Investopedia.com, when looking for the best location for a rental property, you’re essentially going to be looking for the same things that you’d be searching for when buying your own family home. Things like low crime rates, good schools, easy access to transportation and amenities, low property taxes, and an up-and-coming community are all things that can make a rental property more appealing to potential renters. And if a lot of people are interested in moving to the area that you have a rental property in, you’ll be able to charge a lot more for their monthly rent, making you a greater profit.
Avoid A Fixer Upper
While you might think that buying a fixer upper and then putting some work into it would be a great idea when purchasing a rental property, Abhi Golhar, a contributor to Forbes.com, shares that situations like this rarely turn out the way investors intend.
Usually, if you have to spend time making repairs and renovations in a rental property after you’ve bought it, you’ll not only be spending extra money to make the place liveable, but you’ll also be losing money because you won’t have a renter in the space. So if you can, it’s best to avoid buying a fixer upper when buying a rental property.
How To Manage The Property
Before you go through the process of buying a rental property, you’ll really want to consider what your plan is for managing the property.
If you’ve already decided to work with a property management company, Laura Mueller, a contributor to Moving.com, shares that you’ll need to expect to pay them a considerable amount each month for this convenience. But if you’re wanting to take care of managing the property yourself, you’ll want to be sure that you find a property that you feel confident that you’ll be able to care for on your own without having to outsource too many of the repairs in order to save yourself some money.
If you’re wanting to buy a rental property, consider using the tips mentioned above to help you get the right place for your situation.