In many ways, it may seem like being a landlord is ideal. After all, all you need to do is purchase a property and find somebody to live in it, right? Alas, the situation is not that simple and not all properties are profitable plums.
There are many things you must consider when purchasing a property for the purpose of renting it out. While a beautiful building and a lack of repairs are definitely pluses, your analysis must go deeper than this. According to Renters Warehouse, you should ensure that the potential property meets your investment criteria and do a lot of research about the area before you buy.
Before even looking at properties, you need to have your big picture financial goals in mind. For instance, if you want to generate $1,000 a month in income from your rental, you must figure out the level of returns that your property must generate to meet that goal.
You will also need to think about whether you want to try renting single-family homes or if you would prefer duplexes or multi-family units. Each of these has their own set of pros and cons from the landlord’s perspective.
If you do not live in the immediate area that you wish to rent out property in, it is imperative you become familiar with the neighborhood. You should be familiar with the amenities and the condition of other homes surrounding your potential property.
Another thing is to keep an eye out for areas that are experiencing growth or gentrification, as these tend to offer lower buy-ins with higher eventual returns. Being a successful landlord starts with the research.