What to Know before Investing in a Rental Property?



From the planning phase of investing in real estate to actually buying your first rental property, there is a lot of work that needs to be accomplished between these two phases. The task may become more daunting for the first-time investor. However, things can become difficult for pros as well, if they do not consider few basic yet significant points while investing in a rental property.

Although a real estate agent will help you complete the purchase of a rental property but you should start searching on your own too by adopting an unbiased approach. Let' s sum up few pointers that you must consider while searching a right rental property.


You must enquire well about the neighbourhood where you plan to buy your rental home, as it will influence the type of tenants and how often you will experience vacancies. For instance, if you buy near a university, you will get a bunch of tenants (mainly students) but will face vacancies on regular basis. Areas with better and more employment opportunities attract more people. For instance, if you get an average home near industrial estate, you can get tenants for longer time but may not be able to get highly paid tenants.

Educational Institutions

If you have found a property near a school or college, before jumping into buying process, you must check the quality of the educational institution, as it can drastically affect the value of your investment. If the school is not renowned or has a poor reputation, it will directly affect the rental gain of your property. It is also possible that you get a reasonable cash flow but the overall value of your rental property will come into play, when you plan to sell it.

Crime Rate

Whether you plan to invest in a high-end property or a mediocre home, no one will ever want to live in a crime hot spot. Before investing in a property, you must check with the police department for accurate crime status or check with the residents instead of property owner, who is trying to sell you his home. Discuss all the issues including petty crimes, serious crimes and street crimes in order to draw a conclusion. Do not forget to notice the distance of the nearest police station from your home. Mentioning these pointers does not mean that you cannot get a good rental home but all it takes a lot of hard work and research. However, you must keep all these pointers in mind so that you would not end up repenting on your investment.

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