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6 Of The Most Important Characteristics Of Profitable Rental Properties

If you’re looking to invest in real estate, there are plenty of ways to get into the market!

One of the most popular and lucrative methods is to purchase properties and rent them out to short-term or long-term tenants.

For many investors, rental properties offer the right work-to-income ratio and promise long-term benefits.

If this seems like the ideal investment opportunity for you, your first step is to find the perfect place.

6 Of The Most Important Characteristics Of Profitable Rental Properties

Keep reading for six of the most important criteria to consider when purchasing a rental property!

1. Neighborhood

For single-family and multi-family rentals, the surrounding neighborhood can have a significant effect on your rental property’s performance.

A home or apartment in a good, safe neighborhood will draw in more potential tenants and encourage your existing renters to stay for longer, leading to higher and more consistent income for you!

To appeal to more tenants, seek out properties in up-and-coming neighborhoods with active communities.

As the neighborhood grows and more businesses crop up, your property will even increase in value.

If you choose an area that is already popular, it’s likely that there will be other great amenities and resources nearby that will sell your potential tenants on your property.

2. Schools

For tenants with children, the quality of nearby schools will be a deciding factor.

If possible, try to purchase a property that is zoned for schools with good performance scores.

If your property is close to the schools, that’s even better! Convenience is another major bonus for renters who have to commute to and from work or school.

If you’re targeting students themselves, opt for a property that is close to the local college campus with plenty of shops and restaurants within walking distance.

3. Job Market

Work options are another important factor that tenants will consider when choosing a space to rent.

A property that is close to the area’s commercial center will be a competitive choice for commuters who want to cut down on their daily driving times.

If your property is in a location with few public transportation options, you should also keep your tenants’ parking needs in mind.

6 Of The Most Important Characteristics Of Profitable Rental Properties

If your property doesn’t already have space for parking, that could be a necessary addition that will cost you more money in the future.

4. Nearby Amenities

While being near tenants’ workplaces is essential, you will also need to choose a property that is close to necessary amenities like grocery stores, medical offices, restaurants, and parks.

If you are able to mention your property’s proximity to these resources in your listing, you could gain more attention from potential renters.

5. Seasonal Availability

While many of the aforementioned features pertain mostly to long-term rentals, short-term rentals like vacation rentals can suffer during their location’s off-season.

This may be something to consider if you are hoping to make a consistent income from your rental year-round.

You can take advantage of short-term rentals’ adjustable rates to compensate for fewer bookings during the off-season, but you may earn more money if you purchase a property in a location that is highly traveled year-round.

6. Price

Lastly, you should consider the price of your property before jumping in.

While rentals can be very profitable, you don’t want to overspend on a property and lose money on your investment.

You may even need to make renovations or adjustments to your property that will cost you even more in the long run.

On the other hand, you don’t want to forego quality and marketable features by choosing a less expensive option.

Some rental properties, like apartment complexes and mixed-use properties, are even more expensive to invest in and require extra aid.

6 Of The Most Important Characteristics Of Profitable Rental Properties

To make the most of your investment, you’ll need to find a way to finance your property purchase and develop a budget to ensure that you get a solid return.

If you are in the market for a rental property, these characteristics are great signposts of quality rentals.

If you purchase a property that is in a location with useful amenities, necessary resources, and consistent rental demand, you’re sure to make a great profit!

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