Real estate is not just a personal endeavor. Sometimes, real estate is purchased in the hopes of making money out of it as well. If you are looking to get into the landlord business and rent out your property, you should look at these four features before you even buy the property. These features will indicate if a property is profitable or not.
How Far is Civilization?
As the saying goes, location is everything. This is especially true when families and homes are in the mix. While the area might look good on the outside, you must consider its general location in relation to civilization.
Your newly rented property might look good. However, one deal breaker is that it takes too long to drive to the nearest school, or hospital, or even mall.
If a piece of real estate is far from these essential areas – and is in the middle of literally nowhere – then you may want to reconsider your purchase.
Inversely, if a property is close to schools and hospital, this would increase the value of the property by quite a bit. This is great news for a future landlord.
Are you aware that each piece of property has property taxes? Are you also aware that not all properties have the same property tax rates?
If you are planning on renting out a house you just purchased, you might be losing more than you are earning when property taxes are considered.
While high property taxes are not always a bad thing, it is rare to have the ideal situation of a nice neighborhood with long-term tenants staying there.
Also, even if your property has low property taxes, you must also consider the possibility of a town raising the taxes due to them being in dire straits.
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What the Future Holds
There might be a big plot of land in the near vicinity of the property you are eyeing. Whatever the developers have planned for it could spell the difference between profitability and loss.
For instance, if a commercial center or a mall were to be developed nearby, you can be sure that the value of the property and how much you can have it rented out will be increased.
However, this could work negatively as well. If whatever will be developed will serve to damage the environmental sensibilities of the area, that might drive ore people away.
In addition, if there are new housing units being developed, those could serve as competition for you.
If you’d like to know of any future developments in the area, the municipal planning department will have all the information that you are looking for.
Disasters and Accidents
The safety of the community or property is an essential factor to consider. Could there be flooding in the area? Is the property on a fault line? If it is near the water, could a tsunami wreck everything?
Insurance is naturally the best course of action for this. It could help prevent taking heavy losses from these calamities. However, it is also a big expense that will take away from any profits you might be taking.
Keep an eye out for these four factors and you just might pick the right piece of property that you can rent out without any hassles.