How To Recognize A Good Rental Property

Investing in real estate is one of the easiest and most reliable ways to get a relatively steady supply of income from your acquired assets. Renting out is one of the ways to ensure a steady income from your property. Although renting out offices or land is also possible, this article will be focusing mostly on rental property.

When you acquire a home you are faced with two main choices you could either flip, that is, sell it again for a higher price than you bought it and gain profit or you could rent it out and gain steady income from the property. What you choose to do with property that you acquire depends on many things including but not limited to the type of property and the market.

Although renting out provides relatively larger profit in the end than flipping, renting out a property that would have been more suitable for flipping could end in loss and frustration along the way. Therefore, it is important to recognize houses that are good rental properties and these articles discusses four tell-tale signs.

#1. Neighborhood

The condition of the neighborhood in which the house is situated can determine how attractive it is to potential tenants thereby determining if you gain or lose from using the house as a rental property and how much you gain or lose. Houses located in quiet neighborhood, clean streets, and low crime rate are usually very attractive to tenants. If for some reason the number of listings in that neighborhood are higher than normal it might be, a sign that there is something wrong with the neighborhood therefore beware.

The type of neighborhood also determines the type of tenants your property might attract, for instance, houses that are near colleges or universities usually attract students. Know that the type of tenant you get is very important. For instance, having students as tenants might mean empty houses during summer and frequent tenant changing while, having a growing family as tenants might mean a semi-permanent tenant.

#2. Amenities

The Proximity of the house to basic amenities such as the hospital, a grocery store, and a laundromat also determines how good of a rental property the house really is because tenants are more likely to be attracted to houses that are not too far from basic amenities. A house that has easy access to amenities is less likely to remain empty for a long time is a good rental property.

#3. Job opportunities

The job opportunities available in the vicinity of the property also has an effect on how valuable the house is as a rental property because a house situated where there are numerous job opportunities is most likely to attract people who want and who get those jobs.

#4.Comparative average rent

The average rent in the neighborhood or town you acquire the property determines how much income you would get from that property. If the average rent in that neighborhood would provide adequate profit margins from a property then it most likely is a good rental property.


Before deciding to rent out your property, it is important for you to determine if the property is a good rental property. Other things to consider are the property taxes in the area, the type of house (e.g. is it a family home or apartment) and the presence or absence of natural disasters etc.


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