Buy In A Working Class Area
Everyone prioritizes location, but the best location can also bring along very poor cash flow. Rather than that house downtown or on the beach, opt for a moderately priced neighborhood home to ensure you’ll bring in the most profit. Estimate rents and expenses conservatively to stay safe, and you’ll easily see a return of at least 4 to 6 percent.
Look for Low Vacancy
Vacant units are prime opportunities for robbery, vandalism, or squatting, and properties surrounding vacant units are much harder to fill. Look out for this when you’re considering buying a rental property. After all, in an unoccupied area it could take months longer to find tenants and start bringing in any kind of income.
Really Consider HOAs
Before buying a property, it’s important to be fully aware of any additional costs. Developments with a homeowners association may be appealing, but the truth is that they could bring more hassle than they’re worth. Make sure to check on the association’s financial and legal status, to ensure that it’s operational and here to stay. If not, you and your neighbors could wind up taking the financial hit.