Are you wondering how you can make your money work for you rather than you working for your money? The American dream has always been the entrepreneurial spirit.
This is why more and more people are looking into renting properties. That way, instead of wasting away in the bank, you can turn money into more money.
If you’re skeptical, you might be asking yourself, “Are rental properties a good investment?” Keep reading for a guide on all you need to know.
1. Look at the Crime Rate
If you’re thinking about buying a rental property, you must first do a lot of thorough research. Crime rate is one of the biggest factors that will determine how good your investment will be.
A higher crime rate doesn’t just mean your property is in danger of being damaged, it could also be a sign of a low socio-economic client base. Simply put, the lower the crime rate, the fewer headaches you’ll have with your investment.
2. Schools Vs. Universities
While searching for the perfect rental property, you should also pay attention to the distances of grade schools and universities. Grade schools can be great for attracting hard-working families who will hunker down for years to come.
On the other hand, universities will attract a lot of older students. While some students are more well-behaved than others, they usually don’t stay for long periods of time. This could leave you scrambling to find loyal tenants.
Overall, it’s better to have a rental property closer to a grade school than a university.
3. Get a Great Staff
In the long run, a specific rental property is only as good as its property manager. If tenants don’t feel cared for, then they will change apartments like they change socks. When you have a caring and diligent property manager, then happy tenants will be much more likely to stay.
The same is true for your other staff members. It’s important to have knowledgeable and caring employees who can fix a leaky sink and keep the landscape beautiful without having to pull their teeth. Simply put, it’s essential to vet and pick your staff members after deep consideration.
4. Stay Informed About Local Developments
If you want to make sure rental property mortgage rates are worth it, then don’t neglect potential construction projects in your area. A new mall nearby, for instance, can be great for attracting clients. Alternatively, a new apartment complex will become competition.
Competition isn’t always a death sentence, of course. In fact, it could keep you on your toes and challenge you to provide better and better service for your tenants.
The nature of any given development project could either tank or skyrocket your future income. This is why it’s important to always stay on top of what’s going on in the area.
5. The Necessity of Insurance
There’s no getting around rental property insurance. Not only do you need general insurance, but you may also need more specific insurance. For instance, if the property you’re interested in is located at a place with a high risk for flooding, then you’ll need flood insurance.
Earthquakes are another possibility. Did you know that California has the most damaging earthquakes in America?
While insurance is important, it can eat into some of your profits. To determine how valuable your investment is, you’ll need to subtract the cost of essential coverage.
While it does take away from your profits at first, you’ll at least have peace of mind knowing that your investment is protected in case the worst ever happens.
6. Consider All Amenities
Aside from attractive grade schools, other local amenities can be a good indicator of how much profit you’ll be able to earn. If you rent a property in the middle of nowhere, then don’t be surprised at how difficult it is to find enough tenants.
However, the opposite will be true for places located near a huge movie theater and a downtown district, for instance. Even if there’s no gym nearby, you could entice people by investing in your own recreational area.
While it’ll probably be too much to have a fully-stocked gym like at a chain location, getting several treadmills and weight racks can go a long way.
Whatever you do, don’t forget to do research into what’s in the area, whether it be 5-star restaurants or beautiful parks.
7. Pay Attention to Job Growth
Job growth is yet another factor that could let you know if the location of your rental property is ideal or not. The more job opportunities available, the more people are going to want to move into the area.
There is a range of ways you can keep updated about job growth in the area you’re scouting. Paying attention to regular news outlets is one way, but you can also look up the U.S. Bureau of Labor Statistics.
You should also keep your ear to the ground about any major companies that may be opening up a new headquarters in the area. Depending on the type of company, it could either boost the cost of rent or lower it. For instance, a factory that creates a lot of pollution will deter many people.
On the other hand, a company like Google could end up creating a miniature Silicon Valley.
Are Rental Properties a Good Investment? Now You Know
Has anyone ever asked you, “Are rental properties a good investment?” Now that you know, you can tell them all about it. There’s no better time than the present to start investing in your future.
We at Deleware Realty Management can take away the hassle of juggling property tasks. From vetting possible tenants to leasing advertisements, we can make your investment work for you instead of the other way around. Best of all, our rent accounting experts can handle payment collections and all other related paperwork.
If you have any questions about our high-quality services, feel free to reach out. We’re always happy to help.