There's no denying that owning rental properties can yield a lucrative income. After all, some of the world's wealthiest individuals made their fortunes from real estate investing.
Succeeding in this field isn't as easy as buying a property and earning profits. Rather, it's a matter of careful consideration, timing, and astute investment.
Are you ready to learn how? Read these investment property tips for finding the best rental properties to ensure you thrive as a landlord.
1. Conduct Real Estate Market Research
A local real estate expert or property manager will help you pinpoint the best areas for investment. They're informed about local trends, property prices, and rental demand in their cities.
Careful research may even reveal some up-and-coming areas where prices are still low in the face of an impending boom.
2. Choose a Good Location
Location is always the most important consideration when buying a property. Look for well-priced available properties near schools, shopping centers, and recreational facilities.
These areas are most popular with tenants.
3. Identify Profitable Rental Properties
The most profitable rentals differ from area to area. In some cities, industrial or commercial properties are the big money spinners, but the lingering work-from-home phenomenon has recently put a damper on these rentals.
On the other hand, there's continued demand for residential rentals. Let your market research guide you on whether condos, apartments, or free-standing homes are the most popular in your target area.
Don't let supply and demand be your only guide. Carry out rental valuations for each type of property before you commit.
4. Finance Your Rental Property
You must apply for a mortgage unless you can afford to pay cash for your investment property. You can choose between an FHA loan, a VA loan, or a traditional mortgage loan.
The process is similar to that for a primary residence mortgage but usually involves higher interest rates and stricter underwriting standards. You'll need an excellent credit score, a low debt-to-income ratio, and a substantial down payment to qualify for a rental property mortgage.
5. Hire a Property Manager
Hiring a property manager at the outset gives you access to all the above information. They can provide sound real estate investment advice based on their industry experience and knowledge of local markets.
A property management firm also provides all the services you need to ensure your journey as a landlord is as profitable as possible while limiting the time and stress involved.
They are well-informed about local laws and can help you navigate the Fair Housing Act, evictions, and landlord-tenant law.
The Route to Success With Your Charlottesville Rental Properties
PMI Commonwealth is a leading local property management firm, backed by a franchise with decades of experience with Virginia rental properties. We can assist you with proven rental management strategies and complete property management services.
Our experienced team is dedicated to providing expert guidance and top-class service, backed by the latest industry technologies. Read our rental management guide and get onboard so we can help you take your rental business to new heights.
