Ten Great Tips on Evaluating Rental Property
Of course, the rental market will change from city to city, possibly even from block to block. There are some consistent factors that must be considered before investing in a rental property.
Ten Tips for Evaluating a Rental Property Investment:
1. Evaluate your needs and your comfort level. What type of property fills your needs? Are you interested in apartments, multi-family units, or single-family homes? Are you more interested in commercial real estate? What about vacant land that can be developed for rental? There are a wide variety of rental investment properties available, each with different benefits and different limitations. Decide what is best for you.
2. Unless you are already very experienced, you may consider finding a partner with rental investment knowledge. If you decide not to pursue a partner, ask experienced network contacts to share their experiences. Your local district court is a good place to go and listen to the tenant/landlord cases. The more you learn the more potential profit you stand to make.
3. Study the area where you are considering a rental property purchase. Drive through the area at all hours of the day and night. Attend open houses; talk with local Realtors. Make a list of good points and bad points regarding that location.
4. Answer “for rent” advertisements in local newspapers. Visit several of the available rentals and compare what they have to offer.
5. Have your financial backing arranged before you start looking for property. Review your assets with your accountant; will you have enough to cover the mortgage if the property becomes vacant? How much should you have in reserve?
6. Create a team of individuals to work with you. Find contractors who can take care of any needed repairs and/or maintenance. Add a real estate attorney to your team, or maybe a management company. Consider all possible contingencies, and include a team member who is experienced in handling that particular situation.
7. Leave your emotions at the door when evaluating a rental property. You need to ask yourself, “Does this make sense?” rather than “Do I like this house?”
8. Working with your attorney, develop a method for screening potential renters. Do background and criminal history checks. Establish a criteria and requirements and stick to them. Again, leave your emotions at the door.
9. Don’t buy the most expensive house in the neighborhood; it is probably overpriced for the area.
10. Don’t automatically ignore the houses in the worst condition. They may turn out to be of little value as a rental, or they may turn out to be a very wise investment.
The rental investment market is constantly changing, but for now the experts predict the trend is upward with profit potential on a steady upward path.
Success Today,
Wayne Parrish
Wayne Parrish is President of Parrish Financial Group. He is working closely with http://louisvillewholesaledeals.com and with some nationality recognized Real Estate Experts. By successfully guiding and motivating his clients through his Real Estate deals he teaches them to make a great income for their family. His goals is to teach people to become independent from a boss and to seek the opportunity to spend time with family, friends and business partners and enjoy life.
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