Top 10 Features of a Profitable Rental Property

  • AMG Props
April 13, 2022

Maintaining a profitable rental property requires more work than you might expect. Several factors may contribute to the profitability of your property. While you may not be able to tick off every box, you should try to make sure your property meets as many of the following criteria as possible.

1. A Great Neighborhood

Your rental property should be centrally located to make it easy for your tenants to get around to shops, government offices, and other community amenities. It should also be an up-and-coming neighborhood that attracts reliable renters.

2. Low Property Taxes

Maintaining high rental property profits means keeping your expenses as low as possible. So when looking for rental property, keep an eye on property taxes. Considering how frequently taxes rise in premium communities, you’ll want to find a property with taxes that are as low as possible.

3. A Good School System

Think like your future renters and look at area schools when considering real estate features. Families aren’t going to want to move into neighborhoods with poor school choices. Talk to area parents and read online reviews to determine which schools parents prefer.

4. Low Crime Rates

You’ll have problems earning rental property profits if your property is located in a high-crime area. Before committing to your investment property, talk to the police at the local precinct. It would help to also drive around the area in the evenings. Look for families spending time outdoors and watch out for groups that might be looking for trouble.

5. Ample Employment Opportunities

An area with more job opportunities is going to attract more worthwhile tenants. Look at local online job boards and contact the local Department of Labor. You can also estimate job growth by looking at the number of help wanted signs displayed by nearby businesses.

6. Lots of Area Amenities

Since renters want access to good amenities, you can maintain an occupied and profitable rental property by looking into community resources. Visit area parks to see how well they are maintained and check the availability of buses and the condition of public libraries.

7. Commercial Development

You can tell if a neighborhood is on the rise by researching planned development projects. Talk to other real estate investors in your community. Additionally, you can contact the city planning department to learn about local projects. Be wary of buying property where there are plans for low-income multifamily projects.

8. A Supply of Rental Listings

As you check rental listings in your area, look at the number of listings. Many listings indicate a seasonal rental cycle or a community that’s starting to fail. Either case will make it difficult to keep your property rented continually and at a fair rate.

9. A Decent Average Rent

In addition to real estate features, your future tenants will be considering how your rent prices compare to others in the community. You should do the same before buying property. If the average rental rate in the neighborhood won’t be enough to cover your loan payments, insurance, taxes, and other expenses, look elsewhere.

10. Low-Risk Locations

Resist buying properties located in areas prone to wildfires, earthquakes, and other natural disasters. You’ll pay more for property insurance in these areas, cutting into your profits.

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