What are your biggest fears regarding buying a rental property?
High vacancy rates are a big concern. You should also think about maintenance and repair costs. If you buy a property that needs to be fixed up before it’s ready to rent, you’re going to lose money before you can start making money.
You’ll have to factor in all of these concerns when doing your rental property analysis. The more research you do on a property, the easier it will be to decide which rental property to purchase.
Successful rental property investment starts with finding a property that will produce reliable cash flow. Solid rental property investment will also have low maintenance costs and minimal vacancy rates.
In the article below, you’ll find advice on what to look for when doing your rental property analysis. Read on to ensure you’re ready to make the best choice when purchasing your next rental property.
Look for Properties With Low Maintenance Costs
Buying a house as an investment property may seem like a good idea when you consider how much you can charge for rent, but there are drawbacks. For instance, houses with yards will require more upkeep than an apartment with no yard. You could ask the tenant to manage the yard, but that might cause you to lose prospective tenants who don’t want to deal with the hassle of a yard.
When doing your rental property analysis, you may find that an older property is appealing because it doesn’t cost much up front. However, older properties generally need more maintenance than new properties.
Maintenance costs on an old property can eat into your monthly cash flow. This can negatively impact your rental property experience.
Try to Find a Property That Is Already Used as a Rental
When doing your rental market analysis, it’s smart to narrow your list down to properties that someone is renting right now. It’s easier to estimate how much you’ll be able to charge for rent when you’re buying a property that someone is already paying rent for. The more rock-solid numbers you can add to your rental analysis spreadsheet, the easier it will be to estimate your monthly cash flow.
You can estimate potential rent for properties that are not already being rented out, but your estimations won’t be exact. Purchasing a property that is already being rented out will give you a clear understanding of the rent prices you can charge.
Rental Property Analysis Is a Crucial Step In the Investment Process
It’s never easy to identify the perfect rental property for your next investment. However, following the advice above will help you narrow down the list when you’re doing rental property analysis. Your biggest concern should be to limit expenses while maximizing the potential cash flow from your property. If you’re interested in finding a property manager for your next rental investment, click here to get in touch with our expert team.