Knowing what to look for in a rental is one thing, but knowing where to buy can be an entirely different ball game. To help you narrow your search, read on to learn a few tips to help you decide where to buy a rental property.
Whom you want to rent to will play a massive role in deciding where you want to buy a rental property. Different groups of tenants are simply looking for different things. For example, a new family will be less likely to move into a college town and more likely to move into the suburbs near a quality school. Conversely, younger renters will be looking for something more affordable and near the city to be closer to nightlife, activities, and possibly school.
Long-Distance or Local
There is much debate over local and long-distance rental properties, but they both have pros and cons. With local rentals, you have much more control if something goes wrong and can handle tenant issues much faster. With long-distance rentals, you don’t have this luxury and will have to hire a property manager to take care of issues for you. However, with long-distance rentals, you can diversify your portfolio, and if the market crashes in your state, you still have money coming in from your long distance-rental.
Urban vs. Suburban
Urban areas are constantly growing, and rentals in a city tend to be more expensive. While you may be able to make more money in a metropolitan area, the turnover rate tends to be higher due to constant movement and economic growth. Seniors and families tend to live in the suburbs as they are looking for something affordable and safe. While you may make less than you did in the city, suburban renters tend to rent out much longer, creating a more consistent cash flow.
It’s typically very easy to decide where to buy property if you’re looking to open a vacation rental. With a vacation rental, your choices are automatically narrowed down for you, as you will want to rent in and around destination areas like Orlando, Las Vegas, or Nashville. Vacation rentals can make you a lot of money, but only during particular times of the year. This makes it an excellent option for landlords looking to make money on the side with little time investment.
Once you have a handful of areas you’re thinking of buying property in, observing the neighborhood is arguably one of the most important factors when deciding where to buy a rental property. Is there a school, hospital, or grocery store nearby? Is it an area of high crime? What do the surrounding homes look like, and what is the average rent in the area? All of these things can help you find the perfect place to buy a rental property.
If you’re looking to buy property in the Nashville area, Excalibur Homes can help. We’re a property management company based in Nashville, Tennessee, and we know how competitive the market is in that area. We can help you advertise, lease, and manage your property to help you get the most out of your rental.