One of the best ways to earn money these days is to own property and rent it out. The great thing about this money-generating venture is that there will always be people looking for a good place to live in. In the unlikely event that there is no one who would want to live in your property at a given point in time, the value of the property remains and you can choose to sell it instead if you are in desperate need of cash.
Before you jump into this boat, you need to realize that some property prospects are not as lucrative as others. Here are the factors to look into when checking out a particular possibility:
1. Location
In a given area, there are always places that are sought after and there are those which are not. The deciding factors are usually the distance from most amenities, the cleanliness of the public areas-dependent largely on how the council for that area is–, and the general demographic of the people residing there. If you are new to the area, you can ask your real estate agent for some idea on this, or you can check out online community forums to figure out which areas to focus on in your search.
2. The Size of the Property
If your main intention of buying property is to lease it, you would need to assess what kind of property is rented out quickly. Generally, young couples who still haven’t saved enough to come up with a down payment for mortgage are the ones who go for rental properties. Given that they are just two people or maybe three (i.e. couple with a baby), the places they tend to look for are the smaller ones, with two or three bedrooms at most. It may not be practical to invest in a five-bedroom property when leasing agency reports say there’s no demand for it.
3. The Quality of the House
Although the value of the lot it sits on may not depreciate, the house itself can, depending on the economy and the condition of its structure. Make sure to evaluate the quality of materials used for the house; cheap materials will not last a long time, so expect more liability from this house than income. It can’t be helped that previously owned properties would show signs of wear and tear but make sure that they are not major issues because such problems may mean more money going into it just for repairs. Here are some things your prospective house should not have: obvious signs of abundant termite infestation, large cracks on the walls and floors, most of the roof requiring changing, among others.
If you yourself cannot make this assessment, make sure to get experts to do a proper property appraisal for you. Make the effort to have someone look at the property first so that you won’t end up with regrets over a house purchase.