If you want to put your money to work, rental property is an investment option. A 2019 Gallup poll found that 35% of respondents say real estate is the best long-term investment option, while 27% say stocks. Additionally, rental properties can provide cash flow and generate value. Investors also get tax breaks and deductions.
Do you think investing in rental properties is a good idea? Read on to learn the best tips to buy a property and have a rental income .
FIND THE IDEAL LOCATION
The last thing you want is to get stuck with a rental property in an area that is in disrepair. Find a location with low property taxes, a good school district, and lots of amenities. Additionally, a neighborhood with low crime rates, access to public transport, and a growing labor market can also mean a larger pool of potential tenants.
DETERMINE WHAT YOU WANT TO INVEST IN
While single-family rental properties are one way to invest, they are not the only option. You can own a duplex, a condominium, or something larger. See if there is an oversaturation or undersupply of specific property types in the city of your choice. Talking to a local broker is a great way to get information about a particular market.
BUY A LOW-COST HOME
The more expensive the house, the greater the current expenses. Moreover, experts advise never to buy the most beautiful home for sale on the street, and the same applies to the worst house.
AVOID A FIXER-UPPER
Itâs tempting to look for a home that you can get at a bargain price and turn into a rental property. However, this is probably a bad idea. Unless you specialize in large-scale home improvements, you would probably be paying too much for the renovation. Instead, look for a home that is priced below the market and only needs minor repairs.
INSPECT THE PROPERTY
Never buy a home without seeing it first, even if you know the area, even if you can see pictures online, or even if the price is so low. Walk around the property personally. Better yet, hire a professional, licensed property inspector who will assess the home condition and report what needs to be fixed.
Rental property can be an excellent investment if you approach it from a business perspective. While the attractiveness of generating passive monthly income from real estate is high, it is essential to remember that it takes a lot of work to keep the income flowing.