Not Every Investment Property Will Give You The Same Return On Your Investment
In a previous blog, our property manager in San Ramon went over a few of the many reasons why real estate is a smart investment. However, it’s important to know that not every property is a gem, and in order to get the kind of return on your investment that you want, it’s essential that you invest in the right property. At Stowers Real Estate, we understand that what makes a great rental is not always obvious, especially if you are in the market for your first rental property, and that’s why we’ve come up with this list of what to look for in your investment property:
#1. The Neighborhood
If the house has peeling paint, a yard overrun with weeds or a water heater that needs to be replaced, those are all things you can address, but if the house is in the wrong neighborhood, there’s nothing you can do to remedy it. Location is arguably the most important aspect of finding the right rental. The neighborhood where your rental property is located will determine everything from how much rent you can charge to the kinds of tenants you’ll attract. For example, if you select a home that’s in a neighborhood near a university, you’ll probably get a lot of applications from college students.
#2. The Local Job Market
What’s the local job market like in the area around the rental property? If you are lucky enough to find an investment property in an area that has job growth and economic opportunity, you’ll have more tenants to choose from. To find information about job growth and economic opportunity when shopping for a property, visit the U.S. Board of Labor Statistics online.
#3. The Criminal Activity
Given the choice, most people would much rather live in a quiet area than one that is rife with criminal activity. That’s why it’s always a good idea to ask the local police department for crime statistics in the neighborhoods you are looking for property in. Pay close attention to rates of serious crimes, vandalism and petty crimes. You should also find out about how frequent there is a police presence in the neighborhood.
#4. The Typical Rent
Getting a decent return on your investment depends on many factors, but the most important boils down to how much rent you are able to charge. That’s why it’s essential to learn about the average rent in the neighborhood you’re looking in. If the typical rent in the area is not enough to cover your property taxes, mortgage and all of the other expenses that come with investment properties, it might not be the right property.
No one wants to invest in a property that won’t give them a return on their investment, and in our next blog, our property manager will be going over a few more things to look for in a rental property. Stay tuned to learn more, and please contact us today about your property management needs.