Investing in real estate is typically a smart financial move, especially when that property will turn into a passive income for you. However, becoming a landlord by buying a rental property is not an easy venture.
Fortune Builders explains that you will need to find a good piece of real estate that will be valuable as a rental. However, there is no one exact definition of what a good rental property is because it can vary. There are some criteria you can consider, though.
Location is everything in real estate regardless of what type of property you are buying. You want to ensure that you are in a location where potential renters will want to live. Depending on your area, this might be a property close to amenities. In other areas, it may mean something outside of town and away from the busy city area.
You want to buy a property that is in good condition and ready to rent or that will take little work to get to market. The longer you wait to put it up for rent, the more money you will lose. So, it only makes sense to ensure there are no major issues and only minor repairs you need to make to be able to rent it out.
You should always scout the market before buying. Doing this will allow you to get an idea of whether there are enough renters to put your property in need. You also can scope out rental pricing so you do not price yourself out of the market or underprice it and lose money.
There are many more factors you can consider when buying a rental property, but these three are a good start that hit on the minimum things you want to think about.