If you are thinking about investing in rental property, you have likely found a lucrative way to expand your portfolio. Still, not all rental properties are good investments. If you choose the wrong property, you may break even or lose money.
While finding a profitable rental property to buy is far from an exact science, profitable properties typically share a few characteristics. By asking yourself some questions, you may boost your chances of making a lucrative investment.
How is the neighborhood?
Obviously, for your rental property to be profitable, it must attract renters who have the financial resources to pay rent. While you may find a bargain in a transitional neighborhood, buying a property in a better one may make more sense. Looking at the vacancy rate for the neighborhood is a good place to start.
Are the schools good?
While many landlords are happy to rent to students or single adults, enticing families may help you build wealth. After all, because of the need for stability, families often look for long-term living arrangements. When buying your rental property, it may be wise to look at the quality of the schools.
How is the weather?
As a landlord, you do not want to be repairing your unit constantly. Examining weather-related records may tell you whether prospective properties are vulnerable to damage from natural disasters. It may seem strange, but even a few miles may make a difference.
Ultimately, for your rental property investment to be as profitable as possible, you may want to buy the nicest home you can afford in a good neighborhood.