Buying a property and renting it out can be a great investment. Sometimes. The problem is you have to buy the rental property, and in order to make money, you have to successfully rent out the property for a price that is high enough to cover the cost. Whether you're able to do this or not isn't just up to chance, as as there are many influencing factors that you can control. One of the most influential factors is location. |
A rental property will attract tenants so long as it's in a place that's accessible. This means that it is located close to a freeway, businesses, stores, restaurants, etc.. A major reason for people moving is because of a new job. If you're located near many thriving businesses, you're sure to attract their recent hires. Few people want to drive more than 15 minutes to buy their groceries, so don't buy rental property that's out in the boonies.
Consider the quality of the neighborhood when locating rental property. The actual property might be nice, but what is the property like surrounding it? People want to live in a place where they can feel safe, and enjoy the company of friendly neighbors. This has very little to do with actually meeting the neighbors, it's just about looking at the quality of your property, and making sure the property around it is up to par.
If you'll be managing the property yourself, you should buy property that is close to your own home. Some states even have laws requiring out-of-state rental property owners to hire local property management. If you need to deal with property management in San Diego, and you live in Denver, you're going to have to hire somebody else or move closer. It's best to look around your own area and find rental property within a short drive.
There are some factors influencing the success of your rental property that you can't control, but that only makes it all the more important that you take control of what you can. Only buying rental property in ideal locations will help your chances more than anything else.
Westport San Diego offers San Diego property management and real estate services to help you manage, rent, buy, or sell homes in San Diego, Tierrasanta, and the surrounding area. (http://www.westportsandiego.com)
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