Becoming a rental property investor is a great way to generate additional income as well as build your nest egg or investment portfolio. However, buying a rental property should not be taken lightly as there are several factors to consider before signing on the dotted line. Here are some things you should think about when looking for a property to invest in, along with information on how working with a professional property manager can help you maximize your investment.

Consider necessary upgrades to make the property a desirable rental

When looking for an investment property, one of the first things you want to assess is the condition of the property and any repairs that may be needed. Although a rental investment property is likely to need some maintenance and upgrades, you should avoid buying one that requires a significant amount of work and will take a lot of extra time and money to get it in good shape for the market. So what’s the best way to make sure the home is free from major underlying maintenance issues? Hiring a building inspector to walk the property carefully and report any issues they may find. Although a home inspection may incur additional costs, it is undoubtedly worth the peace of mind it will bring before finalizing the purchase.

Going hand in hand with assessing the maintenance needs of the property takes into account the age of the property. Was it built before 1980? Properties built before 1980 run the risk of having asbestos or lead paint, which can potentially lead to health issues for tenants and legal issues for you. Although there are declarations that tenants must sign if a property was built before 1980, it may be best to avoid these older properties altogether. And, remember, as older properties age, additional maintenance expenses are likely to arise.

Assess property location

You know what they say when it comes to real estate: “Rent, Rent, Rent!” Determining if the property you are considering is in a good location is more than just looking at a map. You should consider its proximity to popular city attractions or local colleges if you are considering accepting students as tenants. You can also research projected job growth in the area and schools in the district, as these may be things that increase the likelihood that a potential tenant will choose to rent your property over that of another district.

Another thing to consider is the neighborhood itself – are properties near the one you are looking at in poor condition? Is the neighborhood noisy or does it seem to have other harmful activities going on? Although real estate agents and property managers are not permitted to comment on neighborhood demographics, you can also do your own research here. Visit the house on different days and at different times – this will give you a good idea of ​​what’s going on in the area and whether the type of tenant you’re trying to attract would like to live there.

What are your financial goals when buying a rental property?

The whole point of buying a rental investment property is of course to obtain a return on your investment. And generally, investors should expect rental properties to generate “passive income,” which means it should be a relatively hands-off experience. This is another area where doing a little research will help you with your purchasing decision. Reviewing the price of comparable rental homes and general market conditions in the area will give you insight into pricing your rental and how quickly it can be rented out. Another thing to consider is the home’s tax information – this will help you determine how much you should expect to pay in property taxes and can easily be found in county public records.

While you don’t want to buy a property that will require expensive repairs, you also need to consider how much it would take to make improvements to the property and whether you are in a position to spend that when buying.

The good news here is that owning rental investment properties comes with some financial advantages. Property depreciation can be deducted from your gross annual income and rental properties have the potential to appreciate. Other items such as repairs, insurance and professional services may also be written off. However, always be sure to discuss these things with your accountant or other tax professional.

Walk away from a bad investment

If, after doing your research, you find that the numbers just don’t work for you, you can opt out of investing. Your due diligence period will allow you to inspect all aspects of the property and, if that just doesn’t work out, you can walk away from the deal without penalty (although it should be noted that there are often costs associated with the due diligence period and you may not be able to get that money back).

Talk to the Experts

Work with a professional property manager is always recommended when buying investment properties, even before you start the contractual phase of your purchase. Professional property managers can advise you on all the factors mentioned above and their experience can guide you on the types of properties to buy, the areas to buy and the rental rates you can expect to get.

If you are considering investing in rental property in the Wilmington, NC area, now is a good time to start looking for properties. The real estate market is strong and the local economy is growing rapidly. Wilmington has become particularly popular in recent months as more people choose to leave the big cities in favor of areas with warmer weather and plenty of available single-family homes. Taking these factors into account, rental investment properties in the area will continue to generate higher rental rates and provide you with a better return on investment.

Whether you are a first-time investor or a seasoned investor looking to purchase additional rental properties, the experts at Sweyer Property Management can provide professional advice to help you make the best purchase possible. If you want to know more, contact our team of experts today through our website or at 910.239.1338 for any questions you may have or to receive a free, no-obligation rental analysis.

Sweyer Property Management is a professional, full-service property management company specializing in all aspects of rental management. If you are a real estate investor or owner who would like to learn more about our services and what a professional property manager can do for you, contact us today at 910.256.3031 or through our website.

Sweyer Property Management has shown continued growth in the Wilmington, Leland and Hampstead areas while maintaining excellent Google+ note for customer service. To learn about the company’s full-service management services or to view homes for rent in the area, visit them online at WilmingtonForRent.com.

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