3 Real Estate Investment Tips for Choosing a Rental Property
Those who intend to build or diversify their investment portfolios often choose to buy a real estate property because of its perceived inherent stability of this mode of investment. While it is true that investors may stand to earn a lot more by investing in the stocks of some blue chip company, the risks associated are usually greater too.
On the other hand, a house generally appreciates in value as the years go by. So those who want to play safe when making their investment decisions usually decide to go in for a piece of real estate. The key is to choose rental property that is most likely to bring you an impressive return.
Like stocks, shares, and bonds, the investor needs to be extremely careful when buying a property for real estate investment. Not all properties make sound investments and bring on a cash flow readily. Keep reading for a few pointers to help you choose the ideal real estate investment property.
Tip #1. Choose Single-Family Homes Over Condos
Some research studies have shown that single-family homes tend to be more suitable as real estate investment options than condos. This is primarily because of the kind of renters that the former tends to attract. More than 60 percent of all single-family home tenants have children and so move less often than unmarried individuals in their 20s and 30s and childless couples in the same age bracket. In fact, tenants of single-family home tenants are about 20 percent more likely to live in a house for five years or more.
Tip #2. Choose Rental Property with Location Advantages
When you choose rental property for a real estate investment, consider buying one that will attract tenants in droves and also definitely appreciate in value through the years. One way to ensure this is to buy a property that has obvious location advantages. While judging in the light of this criteria, keep in mind that proximity to a school district and a major interstate and the presence of recreational opportunities in the vicinity will make your property always be in high demand among tenants with varied needs.
What is more, these location advantages will ensure that the worth of your property won’t decline in future and you can sell it easily—to a family with school-going kids, a couple in their sunset years who want to settle in a quiet and safe community with lots of recreational opportunities nearby, or a couple who wants to stay somewhere from where it is easy to commute to their respective places of work.
Tip #3. Choose Rental Property That’s Built Right
When looking for a property to buy to add to your investment portfolio, always go in for a house that has a stable structure and a strong foundation. A sturdily-built house will save you hundreds and thousands of dollars in repair, replacement, and maintenance costs in the long run than a derelict and run-down house that is a few thousand dollars cheaper now. What is more, a sturdily-built house will also attract tenants readily; put yourself in the shoes of your potential tenants and you will get the picture.
The above pointers should help you zero in on a property that will ensure positive returns on your real estate investment by appealing to both tenants and sellers, like a well-built single-family house that is in a fantastic location. With many foreclosed properties in the market right now and low mortgage rates, NOW is the right time to plunge into the world of real estate investment.
Do you have any other tips on how to choose rental property that translates into a sound real estate investment? Let us know in the comments, and don’t forget to share this article.
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