While buying a property for rental purposes is a popular investment option, it is not as easily done, as said. That is why today I am talking about how to choose an income property?
1. Pick The City
There are several factors which determine where you would like to buy the income property. Some popular determinants are:
- Economic growth of a city.
- Rental Market (Short or Long term)
- Ease of access for you.
- Prices of properties.
- Sentimental ties.
- Vacation home.
- Retirement home.
Any one or more of the above factors will be guiding factors of where you want to buy the income property. With the global village concept, there are more opportunities than ever before, when you want to choose a location for your rental property.
Once you have an idea of the city you would like to pick…..
2. Research Communities
Do a research on which communities in a city are more appealing for renters. Look at factors like:
- Median income of residents.
- School ranking.
- Access to public transport.
- Average rent of that location.
A great way to start is to pull up properties for sales and review them. Usually a good community with good rental opportunities have only a few listings up for sale.
Also, reach out to real-estate agents and ask them to set up a listing for you. Or, you can create your own listing alert nowadays by visiting one of the many real estate sales websites.
While it is more affordable to get an income property in a less desirable part of a city, it may not be as reassuring as an investment. You want to have a property which will bring you profit in the long run.
Once you have an area or communities in mind…
3. Create An Excel Sheet For Prospective Properties.
This system has worked out the best for us. Create an excel sheet of all prospective properties. This allows you to view them side by side.
Here is a free sample spreadsheet that you can adapt for your needs.
This Excel sheet has the basic information to get you started on planning which Income Property would work for you the best..
One thing to keep in mind is….
4. Do Not Skip On Property Inspection.
I know it is enticing to skip on getting an inspection done, so as to save on your initial expenses. However, spending a few hundred on inspection is always better than having to pay thousands later for repairs.
So here you go, these are the basic steps for you to choose an appropriate income property.
Let me know if this information helped you?
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