5 Tips for Finding The Right Rental Property Investment
Whether you’re looking to invest in a rental property for the first time, or you’ve been doing this your whole life, it’s always a good idea to keep up with the changing market and read tips for finding the right rental property. Renovo Financial has deep ties in cities across the United States and can help you tap into those growing markets.
1. Look at Market Growth
When you’re interested in purchasing a rental property, you need to know where to look. Looking at areas that are expanding, or have plans to expand in terms of infrastructure, the economy, and population will be a good place to invest in. Generally, you’ll be able to purchase at a lower price now, then rent at a higher rate once the city is seeing rapid growth.
2. Assess Your Finances
It’s always a good idea to assess your finances when you’re looking at rental properties. Knowing what you can spend is essential to a rental property’s success - regardless of whether you’re fixing and flipping or starting new home construction. Having a breakdown of the cost to renovate a house will help determine your budget.
3. Hold out for potential returns
While you never want to go in the red when you’re investing in a rental property, if you can hold out for the market to change, take advantage of it. Keeping an eye on the market growth and rental property trends, and looking at how long you can go without income from the property, while also spending money to renovate it, may mean bigger returns down the road.
4. Look at Your Potential Return on Investment
Sometimes, those new to the rental property game might choose a low-maintenance property and ready to rent out immediately. The investors who have the capital to fix and flip a home bought at auction may see a higher return on investment because they’re investing more into the property. Looking at maintenance costs for the property is also a factor in your investment. While a pool is desirable in some areas, it can be costly in upkeep, lowering your return on investment.
5. Know what your tenants will want out of their rental property
When looking into a rental property, knowing the market will help determine what your potential tenants will want out of the property. Is the market made up of more millennials? They will probably want smart devices in their home and be in close proximity to public transportation. Are there more families looking to rent? Look for a home in an area with good schools and low crime rates. Knowing what your tenants will value will help determine where to find the right rental property.
When you’re ready to invest in a rental property, contact Renovo and talk to one of our team members to discuss how you can continue to grow your rental investment portfolio in the midst of a changing market.