Successful investing in rental property starts with picking the right property.Seasoned real estate investors see a good deal and move fast to close. But how do you know if a good deal is the right one for your rental property?
Too many new investors end up abandoning the rental business when their deep discount deals turn out to be unprofitable properties.
Shop around long enough and you soon realize cheap houses for sale are not so hard to come by. It’s tempting to seize an opportunity while it’s hot, but if you choose the wrong property you could be left holding losses instead of gains.
Take Your Time Looking for the Right Rental Property
Buying rental property is not the same as buying a property to flip at a quick profit. This is a long-term investment. Be aggressive but be practical. Take the time to compare your options, whether you are answering ads for cheap houses or looking through bank owned properties. Your real estate agent might want to sell you on the neighborhood or the layout of a home, but remember you won’t be the one living in it. But you will be the one ultimately responsible for maintaining it.
Look for Rental Property You Will Realistically Maintain
When you look at a property for investment, you foresee potential profit. But don’t forget to also see the time and money you will spend on maintenance. Whether you are hands-on and like doing home improvements or you plan on hiring a property management company, be realistic about the amount of maintenance you are willing to take on. Have a home inspected so there are no surprises.
Shop in Areas with Fewer Rental Properties
Look for your ideal rental property in areas where you will have less competition. Your real estate agent could find you a steal of a deal, but if the neighborhood is full of other rentals your property will look like less of a hot commodity to potential tenants. Shop areas where there are fewer rentals. You will likely attract a reliable, higher quality renter who is looking for an opportunity to move up or lease to own—which means consistent cash flow for you with less wear and tear on your property.
Determine if a Rental Property Will Be Profitable
You find an attractive property at a good price and in a good neighborhood. But before you swoop, do the math. It should add up to positive cash flow or it won’t be worth your investment. Your long-term total expenses for running a property—everything from mortgage to maintenance and taxes to hired professionals—should not exceed rent payments. Don’t forget to include the value of your time and energy in your calculations. Be realistic about the going rents in your area. There are different methods and softwares available for calculating property cash flow.

Manage Your Smart Investment with Property Management Software

Protect your revenue and calculate your risks before and after you buy a rental property with property management software. Efficient real estate software makes it easy to forecast and monitor your profits and losses. Analyze mortgages, interest rates and refinances. Predict your rates of return on your investments.Take the mystery out of buying rental property with some common sense tactics of seasoned real estate investors and the precise tools of current technologies. You will be glad you took the time to find the right property when you enjoy more time and profits.

QUICK TIPS

Pick the right property and significantly increase your odds of long term profits.
Don’t just invest in a good discount—take time shopping when buying rental property.
When you look at a potential rental property, consider all the time, energy and money you will spend on maintenance.
Invest in neighborhoods where there are few rental properties to compete with yours.
When buying rental property, do the math to make sure your investment will add up to positive cash flow.
Property management software takes away the guesswork with buying and maintaining rental property.