Thursday, March 27, 2014
One way of investing in real estate involves buying property to rent out. However, not every property can turn in profits. As a real estate investor, there are several things you must consider before choosing a property to rent out. Get tips...
As with any real estate property purchase, location is a top factor to consider. The location of the property will give you a glimpse of possible future tenants.
Properties that are located near a business district, school or university make for an attractive rental for families and young professionals alike. Choose a clean and safe neighborhood as this is appealing to every renter. With floods and heavy traffic reigning rampant in Metro Manila, it’s also prudent to consider these factors when deciding on a location.
Future developments in the area may affect the property’s potential as a rental. Watch out for new condominium buildings being constructed, as these may offer newer and better rental alternatives to the property you’re buying. On the other hand, commercial developments, public roads and transportation are great additions that will make the property more desirable. It’s important to find out everything you can about future plans in the property’s surrounding location, as this will give you a better handle on the property’s profitability.
Check out current rentals in the area to find out what the running rentals are. Compare this against your projected expenses as a landlord. This may include mortgage payments, property taxes, home repairs and routine maintenance. If the average rental income is unable to cover these basic expenses, the property may not be a worthwhile investment.
If the location has a lot of vacant rental properties, this may also be a bad sign. Do the math and be conservative in your estimates before you buy property.