While there may be some “good deals” to be had when it comes to purchasing a rental property, one thing that real estate investors will sometimes overlook when buying investment properties is where the local area is heading.
This, however, can be key in determining how much you can realistically charge for monthly rent, as well as for attracting good, quality tenants who are provided with reason – and incentive – to pay the amount you are asking.
One big sign that a particular area is on the rise – and that it will likely be in demand going forward – is the plan for both current and future development of new buildings, businesses, schools, and even roads. In some cases, this can be easy to see. Items such as the clearing of land for new construction and / or the widening of local roads can be telltale.
You can also obtain additional information by visiting the local town hall and inquiring as to what future developments are planned for a certain vicinity. If you’re working with a real estate agent or property manager, they may also be able to provide you with the information that you need. That’s because these professionals will typically focus on certain locations, and have an inside track as to current and future happenings.
Purchasing rental property that will be profitable certainly also entails running the cash flow numbers, and the cost of any updates that may be needed. But, just as those three important factors in real estate say – “location, location, location” – will typically be the best place to start.
If you want to further leverage your time spent with managing rental properties, working with a local property management company can provide you with services such as tenant management, property maintenance, and other important items. For additional details on what to look for in a property manager for your investments, Contact Us.