Buying Rental Properties what you should know.
What do you want when you want to buy rental properties? A safe and profitable investment. Here are some great things to look for while making that happen.
Buying rental properties in Redding CA. can be a fantastic way to build your wealth and retirement. However, as in most real estate investing, it is sometimes difficult to know if you’ve found a reasonably good deal – especially the first time you buy. Here are some things to look for to be sure that rental property is a good investment.
1. Location. If traffic is heavier, rentals are easier to rent. A sign will often pull the most when compared to a newspaper. If it is locale, it will usually rent faster. This is also true of places close to a school, shopping and services.
2. Numbers. Run the numbers, then run them again. Get every last reported expense figured into your calculations, and be sure that the rental property cash flow from the beginning.
3. High home prices are good. Look at cities with high home prices, as this creates extra rental demand. What will people most likely to do when prices are high and they can’t afford to buy? They rent.
4. Low maintenance buildings are a must. Avoid cedar-shake roofs at all costs, and wood-sided buildings. Look beyond current expenses to how much maintenance the building will need in the future. Low maintenance means less cost and headaches and ensures more profits.
5. Good rental history no exceptions. Ask to see 5 years of rental history. Note how long residents are staying at each past rental, home or apartment, and if they pay on time.
6. Below market rents. Buying rental properties with below-market rents means you may get to raise rents. Increasing rents mean you immediately raise the assessed value because rental property values are based partly on income.
7. Complies with zoning and fire codes. Have the rental unit inspected, and ask local officials if there are any problems and do your research beforehand.
8. Buy Rentals less than 9 years old. This is somewhat arbitrary, but if you limit your search to newer buildings or fully remodeled ones, you are sure to have less building code and maintenance problems.
9. Owner/manager that is out of state or out of the city. These rental properties are often the best deals because it is very tough to manage rental properties from far away. An out of state seller is likely more often concerned with a super quick sale than a high price.
10. The neighborhood is it stable or improving. Stable is alright, but if we can buy in a neighborhood that is improving, we will rent the units more easily and in less time, and, therefore, get automatic appreciation in value with time.
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