Choosing wisely when selecting an investment
Roseville, Calif. – Have you had thoughts about becoming a landlord, buying a property to rent to reliable tenants and collecting monthly rent?
If you have the ability to follow through on these thoughts there are plenty of condos and homes you could consider buying and renting out. The difficult part is picking the right property and tenants.
4 tips to help you create a positive investment.
1. Days on Market
There are many things to consider when buying an investment property and one tip is to watch how long homes are staying on the market in likely neighborhoods. When you see Days on Market for a neighborhood falling it may be a sign price will be going up soon. Making your purchase before prices increase could lead to greater appreciation.
2. Specialty Stores
Look for properties in neighborhoods where specialty and high end stores are close by. This could include stores like Starbucks, Nugget Grocery, Trader Joe’s and Whole Foods. These chains do a significant amount of research on locations and you can ride on that knowledge. Being relatively close to these kinds of stores improves the desirability of your property
3. Positive Cash Flow
Make your profit when you buy. Your income should cover your costs upfront. If you are looking at what you could make after renovations or time passing you are making a mistake.
4. Tenants
Make sure you have the resources to run background checks on potential tenants. Do not believe what a previous landlord or seller has to say about, “Always pays on time.” It is worth the cost of buying a service such as TransUnion for current or potential tenants. Ask to see pay stubs to show if the tenant has sufficient income to cover costs to live in your property
If you keep these four tips in mind when purchasing and renting out investment property the probability of having a positive experience will increase dramatically.