Important Factors to Consider When Looking for a Rental Property to Buy in Severn Maryland
While you can make money in real estate, you should understand that all properties are not created equal. Forget what you often see on TV shows about real estate investing. You have to look for the right property to make money in the real estate sector. Here are things you need to consider when looking for a rental property to buy in Severn Maryland:
The condition of the House
Even though buying a house that needs some fixing is not a bad idea, you should be realistic about the time and money fixing the house will require. It is always a good idea to have a reputable professional inspect any house you want to buy.
This will help you determine how many repairs you have to do and how much it will cost you. This process will enable you to determine whether or not you are getting value for your money and whether or not renovating the property will only waste your precious time.
Consider the 1% rule
Every real estate investor in Severn Maryland has his or her own goals when it comes to returns. However, it is good to ensure that regardless of your goals, the investment property you want to buy abides by the 1% rule. This rule involves dividing your estimated monthly rent by the buying price of the property.
A good property according to this rule should give an answer of 1%. For instance, according to this rule, a house bought for 100,000 dollars should bring in 1,000 dollars every month. The only exception to this rule is when you want to buy property located in a rapidly changing and improving neighborhood with rents and home values estimated to jump within a short period of time.
Consider the Neighborhood
The location of a property is important. In fact, it is as important as the house itself. Take your time when looking for an area to buy your rental property. Ensure that the area you choose is a place where people will want to live. The number one factor to consider when looking for a good neighborhood is safety.
Make sure that the neighborhood you are considering does not have very high crime rates. Another major factor to consider is curb appeal since tenants are more likely to prefer properties with nicely painted houses and well-manicured lawns.
Will you manage your property all by yourself or will you hire a property management company? The answer to this question will depend on you. If you choose to manage your rental property all by yourself, remember that being a landlord can be a headache at times since you may have to deal with many issues including maintenance issues.
Sometimes you may have to receive a call at 3 AM when there is a plumbing disaster and look for ways to fix that problem. On the other hand, if you choose to have your property managed by a property management company you will have to pay a certain percentage of the monthly rent as the company’s fee for managing your property on your behalf.