When it comes to getting into the rental business, most people start with single-family homes. There are tons of single-family homes being sold each day, and there is a significant demand for single-family homes on the rental market. When it comes to finding the right single-family home to invest in, you will want to make sure you know the signs that a home will be a profitable rental.
1. Quality Schools
With a single-family home, there is a high probability that a family with children will rent the home, which is why you always want to pay attention to the quality of the public schools in the area where you want to purchase a rental property. Owning a home in what is considered a good school district can add value to your rental property, allowing you to bring in more money and increasing the chance that you will not have any issue finding quality tenants.
2. Crime Statistics
Second, you are going to want to look at the level of criminal activity in the area. Focus on the level of vandalism and theft in the area and pay attention to whether the crime information is going up or going down in the area. You want to purchase a home in an area with low crime rates. A rental located in a neighborhood with high crime rates could be more difficult for you to fill over time.
3. Job Market
Third, you should pay attention to the job market in the area where you want to purchase a home. Find out the average employment rate in the area and if industries there are on the decline or are doing well. For example, a neighborhood where coal is the biggest job producer may not be the best investment, as coal jobs are supposed to decline in the coming years, which means there will be lower availability of people looking to rent.
A neighborhood that is getting a fulfillment center for a major realtor and a mortgage company is opening a large center is one where new industries are moving in, which could increase demand for a rental, and shows signs of being a good prospect for years to come.
4. Vacancy Rate
Fourth, you need to investigate the vacancy rate for the area. If there are high numbers of vacancies for similar types of homes like the one you are looking to purchase, you may have difficulty finding renters. If the area has a lower vacancy rate, a rental property should be in higher demand, and you should have an easier time finding renters.
When it comes to purchasing a single-family home as an investment, you need to consider more than the home's quality. You also need to look over the local school system's quality, the local crime level, the job market long-term prospects, and the vacancy rate to choose a home in a location that will end up being profitable for you. Contact a real estate investment group for more information.
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