Best Rental: Invest in Rental Properties? Maximize your income with these 5 tips

If you are thinking of investing in a property that you can rent, there are a number of things you can do to ensure that the property you buy is a good investment, and secondly, that the property is always rented out.

The way to maximize your income is to make sure you look at this formula:

Maximum income = (Highest rent + Lowest default + Lowest maintenance) x 12 months

How do you get all these things? Well, it’s not easy, otherwise everyone would do it, however, here are 5 top tips that will put you in the best position to achieve your investment goals.

1. Look for Economic Redevelopment Zones

Watch the national and local news from areas that have deteriorated badly but something big has happened. It could be the announcement of a new Super Casino, a new high-speed rail link to a big city, the creation of a huge inward investment – ​​think about what happened to real estate investment in Atlanta, GA, when that city hosted the 1996 Olympics.

Developing a city as a commuter hub, reshaping downtown areas into trendy places to live are great places to invest. Once development begins, Starbucks, Borders, banks and bistros follow. For today’s urban professionals, these are places they will want to live in, as they offer good demand, force rents up, and reduce remaining rental vacancies.

2. College towns

Places that are college or university towns are always high on any investor’s checklist. Not only do they ensure a regular influx of prospective tenants, but the youth and energy of the students rubs off on the rest of the city: they are trendy places with lots to do, fun places to eat and good sports facilities.

College “towns” like Columbus, OH (State of Ohio), Tempe, AZ (State of Arizona), or Austin, TX (University of Texas) are solid places to invest, as there are always going to be potential new tenants.

The only potential drawback is that sometimes students can have a hard time transitioning from having a nice mom who takes care of everything to taking care of that cleaning and cooking job, so check your students to avoid high cost of maintenance! maintenance!

3. Nearby cities

These cities may not be the prettiest, but their very location means they are always going to be sought after by those workers who need to be within walking distance of work, but don’t want or can’t afford to live closer to home. to work. Places located near interstate intersections, large train stations, local commuter airports, and even ferry stations (think Staten Island!) will always be chosen by people who need to travel. The presence of infrastructure allows them to travel further, faster and more efficiently.

An added investment benefit here is that as prices rise for property closest to the workplace, your property value will increase as workers look further afield for the right accommodation for the money they are willing to spend. to pay.

4. The state capital or a regional center

The demand for property in a central capital city is generally higher than the number of properties available to buy or rent, so although the costs of buying such a property can be high, you will be rewarded by high levels. of demand, constant levels of demand and good capital growth.

Look at neighborhoods within the city that have traditionally been seen as the poorest parts, as renters will consider these areas to offer better value for money.

5. Your own playing field

It is always worth considering places closer to home. Buying a place next door or just down the street from where you live may seem like a strange idea, but think about it: you know the place, the neighborhood, the facilities, and the type of people who would be your target market.

Having a place that can literally watch over and act as its own management agency will lower your operating costs. Even if you decide to hire a management company to manage the property, a local property allows you to control how they are taking care of your investment. Owning a local property can be less stressful and time consuming.

Keep these five principles in mind as you do your thorough research before you buy. Reviewing the property’s historical price, number of residents, and location can help you maximize the profit you’ll realize by reaping the rewards of your investment.