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How to Know if You’re Buying a Good Rental Property

Hollywood House for SaleInvesting in a Hollywood rental property can be quite an investment. Nonetheless, it’s important to know what to look for in a property, especially if you want a return on investment. Some single-family houses make better rental properties than others. Each of these investment properties has different qualities you can sift through to help you find one that has profit potential. A property that has all these qualities is surely a worthy investment.

A quality found in any good rental property is the market in which it is located. In most cases, growing real estate markets are where to find profitable rental homes since that’s where the demand is for rental houses. The location of the property will also establish things like your tenant pool and rental strategy.

Other signs to look for are a strong local job market, low crime rates, and future development plans. It’s also a wise choice to make yourself aware of nearby amenities, public transportation, and features of the property that might be trendy or in-demand. To maximize the return on your investment, it’s wise to understand the ebb and flow of the local market before buying anything.

The price of the property is quite dependent on its location. Find a rental property that falls within your budget, but make sure it’s also priced at or below the market rate for the area. When calculating the property price, don’t forget to include things like closing costs, repairs, and insurance. The best thing about getting an affordable rental property is having leftover cash reserves.

The lowest-priced property, though, isn’t automatically the best value. If the property is priced well below comparable properties in the area, you might want to find out why first. It just might be that you’ve struck gold in the form of a great bargain that gives you instant equity!

Another thing you have to be keen on when choosing a rental property is cash flow. An ideal rental property will continually give you a strong positive cash flow. In essence, you should be earning a profit beyond your property expenses every month. To measure whether a property will provide positive cash flow, you’ll need to do a rental property analysis. Don’t forget to account for property-related expenses, especially those that are often forgotten. After everything is accounted for and you’re certain the cash flow is positive, you could have yourself a good rental property.

Part of calculating your numbers will also include the cost of any repairs and maintenance. All single-family houses require regular maintenance and repairs. There are those, however, that might try to sell you the house without fully disclosing any major repairs. If you don’t reside in close proximity to your rental property or don’t have experience with home remodeling and repair, be sure to include property management costs in your calculation.

Despite it is fascinating to try and supervise your own investment property, it is safer to hire a professional property management company, such as Real Property Management Asset Solutions, to do it for you; especially if this is not something you’ve done before. Be thorough in jotting down all of the necessary costs, as well as monthly fees, so that you can take all of these into account when drafting your budget.

Use these qualities to your advantage by allowing them to aid in your analysis of which properties make for good investments.

Got your sights on a new rental home but in need of help managing it? Real Property Management Asset Solutions is here to help! Contact us online or give us a call at 954-889-5627.

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