6 points to consider prior to purchasing investment property
As a newbie to the rental property business, you may be nervous about making that first purchase of your investment property home. Do you know what things to consider to attract renters? If you have ever rented a home yourself, then you have experience in what home renters are looking for. Most homes are renting to families who are happy with the less burdened renter lifestyle, or who are new to an area and checking out that area before they buy a home. As in every part of the Real Property Management Peace property management process, your Las Vegas professional property management team can help answer any questions you may have during the purchasing phase. Here are few suggestions from the pros:
- Look for homes no older than 15 years. This will help keep down maintenance costs and save you money long term.
- Look for homes that are not located on busy streets, home that have some privacy with usable back yard are generally more attractive to renters.
- Rental properties should have at least 3 bedrooms and 2 bathrooms and be located in desirous neighborhoods. For Las Vegas, almost every neighborhood is appreciating with some growing over 30+%. These houses allow you, as the owner, to generate higher rent.
- Consider the proximity of the property to things people need and/or want: Schools, parks, shopping and dining.
- If the home is in a HOA, there may be fees for maintenance, violations, signage, and parking rules. Be sure to identify what the HOA codes are and how you will enforce them with your tenants.
- CAP Rate: what ultimately is most important? Can you make money on your investment property. Defining all of the property’s expenses will the rent exceed the expenses? Also will the property appreciate in value to off-set the shortfall and limit the risk? Understanding the financials for the property is critical to what makes a good rental property.
Remember that the decisions you are making in the purchasing process are ones that will affect you long-term. The property type you choose will affect what type of potential tenants you attract, and how long the home stays vacant. These are all things to consider as you begin your journey into the rental property industry. By making smart decisions today, you and your Las Vegas property management team will be pleased with your future results.
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