The sole purpose of investing in real estate is to make money from it. It’s not even just making money from it, but making a lot of money. It’s not always a sure thing, though. This is especially true for real estate. You must consider a lot of variables when looking to purchase real estate for investment purposes. These variables directly affect the amount of money you can earn from your investment, in other words, your return on investment (ROI).
To ensure you make the best decision possible when it comes to investing in real estate, consider the following factors.
It’s always about location. When you purchase a home, apartment building, or other residential property, the amount you rent it out for depends on how convenient it is for people. Renters want easy access to stores, restaurants, entertainment, schools, and in some areas, public transportation.
Understanding who your renters will be when you purchase a rental property helps you determine if the location will help you charge a good rental amount. For instance, if the area is populated with a lot of families, you know the best location for your rental property would be near parks, schools, and child-friendly retailers. If the area has a lot of seniors living there, the rental property should be close to public transportation or walking distance to senior-related activities.
The more you have to offer renters, the higher you can set the rent price. That goes for amenities too.
What your rental property offers tenants matters when it comes to how much you charge for rent. Properties have higher rent when they offer a gym in the building and on-site parking. Other amenities may include:
- Security System
This mostly has to do with investors seeking to purchase an apartment complex, but those looking to purchase a single family home to rent can look for amenities as well. These amenities may not be on the property, but it may be part of the community. Some communities have a pool, clubhouse, dog park, etc., and they are all considered amenities.
Bedrooms matter a lot when looking for properties with high rent prices. You can expect to charge $100 more for every added bedroom. Again, think of the people you want to target for your rental property. If you want to rent to growing families, it’s better to purchase real estate that accommodates at least 4 people living in the home.
The size of the bedroom will make it easier or harder to rent out. Larger bedrooms, especially the master will rent much faster than when all bedrooms are small.
The condition of the property matters so much. People want to live in a place that looks nice because they not only have to look at it all the time, but they want to show it off to their family and friends. You’ll have a much easier time renting out your rental properties if it is in good to very good condition. The better it looks the higher the amount you can charge for rent.
When considering the condition, be sure to think about the inside and outside of the property. Great curb appeal is incredibly important as well. Landscaping and neighboring properties contribute to the curb appeal, so look at all of this as you decide if you should purchase the investment property.
5: Area Rental Prices
Do your homework when you’re looking for investment properties. You need to know what the rent prices are around the property you’re considering. Rental comparison tools like Rentometer can help with your research, as it has information about rental properties throughout the U.S.
If the area’s rental prices are not anywhere close to what you want to charge, you’ll have a difficult time renting the property. It’s just like when selling a house. The sales prices for neighborhood houses affects how much others can be sold for in the area. While there are always individual differences, those differences don’t usually make a huge impact on the price.
Choose the Best Real Estate Investment Property
When looking for the best real estate investment property, consider the location, amenities, bedrooms, conditions and the nearby rental prices. All these factors will help you know which properties will rent quickly and for the rent price you want per month.
This blog article was contributed from Rentometer.com
Rentometer provides essential rent data for the rental housing industry. Everyone from landlords, property managers, owners, and renters can research and compare rental rates on Rentometer.com. In addition to the rent comparison tools exclusively found on Rentometer, the website offers landlords and property managers information and resources used to help in rental housing operations and maintenance.