The best way to make money in real estate investing is by buying the right property for the right price. However, that isn't always the best advice. Many people buy a property that is really cheap, only to find out that they have to spend a lot of money (often thousands and thousands of dollars) to make it habitable. These aren't often the best moves financially. It can take a lot of time and money to get them either ready to sell or rent out. Because of this, you have to be very careful about the homes that you buy as investments. But how can you know that the property that you are looking at is good for a rental property?

Here are some qualities that you need to prioritize in order to get the most bang for your buck!

6 Rental Property Qualities You Should Prioritize

1. Look at the neighborhood. 

The neighborhood is very important when it comes to finding a good rental property. You are going to want to find places that are in a decent location. If you want to rent to college students, you are going to want to find places near a college. However, that being said, you may struggle to find tenants all summer long. If you want to cater to families with small children, you are going to want to find places that have parks nearby. Good schools are also a must if you want families. 

2. Study the criminal activity in the area. 

Nobody is going to want to live in an area that is filled with crime. You can check with the local police to see how safe the neighborhood is. Don't forget to ask to see if the crime is getting better or worse. You may want to pass on a property because there is so much theft (and it is getting worse). Stick to safe neighborhoods, and you will have less trouble finding tenants. 

3. You are going to need good parking or find a place that is near public transportation. 

There are many renters who have their own car and want to ensure that they can park off of the street. However, there are just as many people who want to be able to walk to the grocery store, restaurants, and other amusements. If you choose to cater to those who prefer to walk, you may want to make sure that they can easily hop on public transportation to get to their job and other places that they may need to go. 

4. Study the rental activity in the neighborhood. 

You should look around and see what is going on with the rentals in the area. What are most people comfortable paying for rent each month? Could you offer that and make money on your rental property? Also, is there are a lot of rentals on the market, or are people struggling to find a place to rent? If there is a large number of rentals, you may want to pass. Not only could there be a reason for that, but you might need to lower your rent, just to find tenants. That might not make financial sense for you to buy a rental in that area. However, if people want to move into an area but can't, due to the number of places up for rent, you might have found yourself a good location. 

5. Look at the property itself. 

You shouldn't turn away from properties due to their looks. A good coat of paint and some new carpet can improve almost any property. However, you need to consider whether it needs five thousand dollars to make a difference or you are looking at one hundred thousand dollars to fix some major problems that are going on. You also need to consider age. If the home (and all of the appliances) are older, you may have to do frequent repairs to keep it up and running. You may have to replace the appliances within a few months or years of owning them. If you bought a newer property (or bought an older one to fix up), you won't have to fix as many things in the beginning. 

6. Don't forget to consider property taxes and insurance. 

As a rental property owner, you are going to have to think about property taxes and insurance. There are some places that are so expensive when it comes to taxes that you won't be able to make any money after you are finished paying the bills. The same can be said about insurance. If you live in an area where there is flooding and other natural disasters, your insurance may be extremely high. You might not be able to make a profit on the property. 

Conclusion

Before you even start looking at rental properties, you need to do your research. You need to find the right neighborhoods, to attract the right tenants. If the area is filled with crime (and it is just getting worse), you may need to pass on that opportunity. You will struggle to find tenants because they won't feel safe at home. If you are catering to young families, you are going to want to make sure that you find a property with a good school. Playgrounds will also attract young families. 

It is also important to look at what else is available in the area. What is a typical rent? Can you make money if you charge that? If you can't, you are going to have to pass on that property. Also, look at how many rentals are available. If there are ten or twenty apartments for rent in the area, there may be a reason for that. People may not want to live in that area. Even if you lower rent, you may still struggle to find someone for your rental property. However, if there are hardly any and people want to move there, you might want to jump on that property (before someone else grabs it)! 

If you are starting to think about buying a rental property (or you have been in the business for some time), you should consider property management. It will make your life a lot easier.

Don't hesitate to contact us today. Learn more about how we can help you grow your business (and take some of the stress off of your shoulders). We offer free estimates, so you will be able to see what we can do for you, without worrying about the cost.