• About
  • Blog
  • Contact
Thursday, March 30, 2023
No Result
View All Result
The Daily Buzz
  • Home
  • Alternatives
  • World
  • Politics
  • Business
  • Science
  • Tech
    • All
    • Activate
    The 6 Pillars of Project Management
    The 6 Pillars of Project Management
    The Way SQL Could Be Useful for Business Analytics
    The Way SQL Could Be Useful for Business Analytics
    SQL Server Overview: Editions, Versions, Architecture, and Services
    SQL Server Overview: Editions, Versions, Architecture, and Services
    Why AI and Machine Learning Are the Future of Technology
    Why AI and Machine Learning Are the Future of Technology
    The Ultimate Guide to 10G Network Switches: How They Work and What to Look for
    The Ultimate Guide to 10G Network Switches: How They Work and What to Look for
    Fun Ways to Teach Kids Coding
    Fun Ways to Teach Kids Coding

    Trending Tags

    • Sillicon Valley
    • Climate Change
    • Election Results
    • Flat Earth
    • Golden Globes
    • MotoGP 2017
    • Mr. Robot
    • Activate
  • Entertainment
    • All
    • Gaming
    • Movie
    • Music
    • Sports
    The 8 Best-underrated Movies on Netflix Right Now
    The 8 Best-underrated Movies on Netflix Right Now
    Market Size of Mobile Games: Gaming Market Trends and Growth Forecast
    Market Size of Mobile Games: Gaming Market Trends and Growth Forecast
    Introduction to Game Server Hosting
    Introduction to Game Server Hosting
    5 Reasons to Shop for Toys Online This Holiday Season
    5 Reasons to Shop for Toys Online This Holiday Season
    The Japanese Tanto: What You Need to Know
    The Japanese Tanto: What You Need to Know
    Can You Crossfade Apple Music?
    Can You Crossfade Apple Music?
    What do rips or rip mean? – Letterkenny fandom
    What do rips or rip mean? – Letterkenny fandom
    What Is Ffxiv Parsing?
    What Is Ffxiv Parsing?
    How Many Satchels for Sheet Metal Door Do I Need?
    How Many Satchels for Sheet Metal Door Do I Need?
  • Lifestyle
    • All
    • Fashion
    • Fitness
    • Food
    • Health
    • Health Care
    • Home
    • Travel
    A Guide to Luxury Linen: What You Should Be Looking For
    A Guide to Luxury Linen: What You Should Be Looking For
    7 Interesting Places to Visit in Bulgaria With a Trip From Sofia
    7 Interesting Places to Visit in Bulgaria With a Trip From Sofia
    Bags for Men: 6 Types and How to Wear Them With Your Outfit
    Bags for Men: 6 Types and How to Wear Them With Your Outfit
    Find Your Inner Peace Through Zlibrary: How Reading Can Help You Manage Stress and Anxiety
    Find Your Inner Peace Through Zlibrary: How Reading Can Help You Manage Stress and Anxiety
    Best Shoes for 2023
    Best Shoes for 2023
    Essentials Hoodie is the Latest Fashion
    Essentials Hoodie is the Latest Fashion
    How Tracksuits Become a Stylish Choice
    How Tracksuits Become a Stylish Choice
    5 Bohemian Beach Wedding Dress Styles for a Summer Wedding
    Understanding Medical Negligence and What to Do if You Suspect It Has Occurred
    5 Bohemian Beach Wedding Dress Styles for a Summer Wedding
    5 Bohemian Beach Wedding Dress Styles for a Summer Wedding
    The Best Promise Rings for Her
    The Best Promise Rings for Her

    Trending Tags

    • Golden Globes
    • Mr. Robot
    • MotoGP 2017
    • Climate Change
    • Flat Earth
  • Home
  • Alternatives
  • World
  • Politics
  • Business
  • Science
  • Tech
    • All
    • Activate
    The 6 Pillars of Project Management
    The 6 Pillars of Project Management
    The Way SQL Could Be Useful for Business Analytics
    The Way SQL Could Be Useful for Business Analytics
    SQL Server Overview: Editions, Versions, Architecture, and Services
    SQL Server Overview: Editions, Versions, Architecture, and Services
    Why AI and Machine Learning Are the Future of Technology
    Why AI and Machine Learning Are the Future of Technology
    The Ultimate Guide to 10G Network Switches: How They Work and What to Look for
    The Ultimate Guide to 10G Network Switches: How They Work and What to Look for
    Fun Ways to Teach Kids Coding
    Fun Ways to Teach Kids Coding

    Trending Tags

    • Sillicon Valley
    • Climate Change
    • Election Results
    • Flat Earth
    • Golden Globes
    • MotoGP 2017
    • Mr. Robot
    • Activate
  • Entertainment
    • All
    • Gaming
    • Movie
    • Music
    • Sports
    The 8 Best-underrated Movies on Netflix Right Now
    The 8 Best-underrated Movies on Netflix Right Now
    Market Size of Mobile Games: Gaming Market Trends and Growth Forecast
    Market Size of Mobile Games: Gaming Market Trends and Growth Forecast
    Introduction to Game Server Hosting
    Introduction to Game Server Hosting
    5 Reasons to Shop for Toys Online This Holiday Season
    5 Reasons to Shop for Toys Online This Holiday Season
    The Japanese Tanto: What You Need to Know
    The Japanese Tanto: What You Need to Know
    Can You Crossfade Apple Music?
    Can You Crossfade Apple Music?
    What do rips or rip mean? – Letterkenny fandom
    What do rips or rip mean? – Letterkenny fandom
    What Is Ffxiv Parsing?
    What Is Ffxiv Parsing?
    How Many Satchels for Sheet Metal Door Do I Need?
    How Many Satchels for Sheet Metal Door Do I Need?
  • Lifestyle
    • All
    • Fashion
    • Fitness
    • Food
    • Health
    • Health Care
    • Home
    • Travel
    A Guide to Luxury Linen: What You Should Be Looking For
    A Guide to Luxury Linen: What You Should Be Looking For
    7 Interesting Places to Visit in Bulgaria With a Trip From Sofia
    7 Interesting Places to Visit in Bulgaria With a Trip From Sofia
    Bags for Men: 6 Types and How to Wear Them With Your Outfit
    Bags for Men: 6 Types and How to Wear Them With Your Outfit
    Find Your Inner Peace Through Zlibrary: How Reading Can Help You Manage Stress and Anxiety
    Find Your Inner Peace Through Zlibrary: How Reading Can Help You Manage Stress and Anxiety
    Best Shoes for 2023
    Best Shoes for 2023
    Essentials Hoodie is the Latest Fashion
    Essentials Hoodie is the Latest Fashion
    How Tracksuits Become a Stylish Choice
    How Tracksuits Become a Stylish Choice
    5 Bohemian Beach Wedding Dress Styles for a Summer Wedding
    Understanding Medical Negligence and What to Do if You Suspect It Has Occurred
    5 Bohemian Beach Wedding Dress Styles for a Summer Wedding
    5 Bohemian Beach Wedding Dress Styles for a Summer Wedding
    The Best Promise Rings for Her
    The Best Promise Rings for Her

    Trending Tags

    • Golden Globes
    • Mr. Robot
    • MotoGP 2017
    • Climate Change
    • Flat Earth
No Result
View All Result
The Daily Buzz
No Result
View All Result
Home Lifestyle Home

5 Tips for Evaluating Rental Properties

by The Daily Buzz Team
in Home
6 min read
5 Tips for Evaluating Rental Properties

Detail of Modern residential flat apartment building exterior. Fragment of New luxury house and home complex. Part of City Real estate property and condo architecture. Copy space. Blue sky

With reduced real estate prices, this is undoubtedly a great time to invest in this market.

Because of this, you might consider buying a rental property that can offer you and your family infinite wealth in the future.

However, you shouldn’t rush and spend your hard-earned money to acquire rental property without first doing your due diligence.

This is a mistake that many aspiring real estate investors make and, as a result, buy a bad property that doesn’t generate enough money as expected.

Luckily, you can avoid finding yourself in such a fix by following these specific tips to help you pick out the best rental property and start making a profit.

Close-up Of A Man’s Hand Filling Real Estate Appraisal Form With Pen

Contents

  • 1 1. Factor in the 1% Rule
  • 2 2. Consider the Rental Property’s Location
  • 3 3. Run the Numbers
  • 4 4. Understanding the Risks
  • 5 5. The Property’s Age
  • 6 Takeaway
        • 6.0.0.1 The Daily Buzz Team

1. Factor in the 1% Rule

It’s best to project how much you’ll earn from your real estate investment; this is where the 1% rule comes in.

This rule states that a rental property you choose to invest in should ideally yield about 1% of its purchase price in rent and any extra expenses after purchase.

For example, if the rental property had a list price of USD$100,000 and you did renovations that added USD$10,000, the monthly rent should be USD$1,100.

Therefore, your gross monthly rent should ideally be 1% of the total investment, which is USD$1,100.

Examining the pro forma report will help you look for a rental property that satisfies the 1% rule to know whether this investment will earn you a sufficient income in the long run.

With that said, the 1% rule might not always be applicable, especially regarding rental property in a high-end neighborhood.

In this scenario, you may choose to lower the expected monthly return and see this purchase as a long-term investment.

2. Consider the Rental Property’s Location

Location is the most significant factor to consider when evaluating a rental property. Remember, you can’t change the property’s location, so you must be sure about the neighborhood.

When first deciding on the right property location, some questions to ask yourself to gauge its suitability include:

  • Is the location safe?
  • Are there plenty of amenities nearby?
  • What are the demographics of the area?
  • Is it rural, suburban, or urban?
  • Is the neighborhood in decline, stable, or expanding?
  • Are there future opportunities for growth?   

These are just a few things you should consider when determining whether a rental property is right for you. It’s been shown that a good location is one of the critical elements for a successful rental property.

This is because it boosts the potential to attract more prospective tenants who can afford to rent the property and have access to amenities such as schools, shopping malls, parks, and transport facilities.

If you want to invest in high-demand properties, consider the ones near popular cities or towns. These areas have more people living there, so they’ll appeal to more tenants and make your investment more profitable.

3. Run the Numbers

When considering buying a rental property, it’s essential to run the numbers to assess whether it’s a good investment.

Doing this is especially crucial because purchasing a rental property isn’t cheap. Therefore, you want to be certain that it’s a worthwhile asset.

When running the numbers, you should start by first understanding your budget, and here are some questions you need to ask yourself:

  • What sum of money can you set aside for the real estate investment?
  • Where can you get an extra budget if your budget is enough?
  • What sum of money do you need to borrow? Also, what are the expected interest rate and mortgage payments?
  • How much money are you ready to lose?

Besides your budget, you also need to run the numbers to find out how much the rental property is worth, and some important things to answer are:

  • What’s the estimated rent you’ll earn from the real estate investment?
  • What are the property’s actual income and expense sheets?
  • What’s the Net Operating Income for the rental property?
  • What’s the insurance cost?
  • How much tax will you pay?
  • How much will the annual property maintenance cost be?

After determining the rental property’s value, you can decide if the real estate investment is a viable purchase.

And as with any expensive purchase, doing this is vital as you don’t want to rush buying a rental property without knowing what to expect.

4. Understanding the Risks

Like any other investment, buying a rental property comes with risks.

Therefore, you must take time to learn of the potential risks to avoid being caught off-guard and see whether this is a risk you’re willing to take. Some of the possibilities you need to know about include:

  • Increase in property taxes
  • Your rental interest might not be as expected
  • There might be a change in the local market economy
  • You might have bad tenants, thus often deal with issues such as eviction or repair costs
  • You might need to do extensive repairs, which won’t be cheap

Even though you shouldn’t dwell too much on these possible risks, you shouldn’t ignore them because investing in a rental property isn’t guaranteed.

With these risks in mind, you won’t be caught unprepared when an issue arises. Because of this, your finances will be a lot more flexible.

5. The Property’s Age

Another vital thing to consider when buying a real estate property is its age. This is an essential consideration because the older a real estate property is, the more money you’ll need to spend on repairs.

However, this doesn’t necessarily mean that older rental properties aren’t excellent investments should you want to try your hand in real estate investing.

Older rental properties also don’t have certain amenities and features that might make them appealing to prospective tenants.

Because of this, you might need to renovate your home or lower the monthly rent to entice potential tenants into paying.     

Takeaway

Investing in real estate is an excellent way to diversify your investment and enjoy consistent cash flow in the future. But this doesn’t mean that rental property investment is foolproof.

This is why this guide has outlined tips you need to have in mind when evaluating a rental property to see if it’s a worthwhile investment.

Having these insights will help you make the right decision as to which rental property to buy.

The Daily Buzz Team

The Daily Buzz combines the pursuit of interesting and intriguing facts with the innate human desire to rank and list things. From stereotypical cat pictures to crazy facts about the universe, every thing is designed to help you kill time in the most efficient manner, all while giving you something to either laugh at or think about!

  • The Daily Buzz Team
    https://the-daily.buzz/author/admin/
    A Guide to Luxury Linen: What You Should Be Looking For
  • The Daily Buzz Team
    https://the-daily.buzz/author/admin/
    Maintaining a Healthy Lifestyle: 10 Tips to Follow
  • The Daily Buzz Team
    https://the-daily.buzz/author/admin/
    The 6 Pillars of Project Management
  • The Daily Buzz Team
    https://the-daily.buzz/author/admin/
    7 Interesting Places to Visit in Bulgaria With a Trip From Sofia

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Like us & Receive Daily Updates

Trending Now

  • A Guide to Luxury Linen: What You Should Be Looking For
  • Maintaining a Healthy Lifestyle: 10 Tips to Follow
  • The 6 Pillars of Project Management
  • 7 Interesting Places to Visit in Bulgaria With a Trip From Sofia
  • The Way SQL Could Be Useful for Business Analytics
  • About
  • Blog
  • Careers
  • Contact
  • Our Team
  • Privacy Policy

© 2020 The-Daily Buzz

No Result
View All Result
  • Home
  • Politics
  • World
  • Business
  • Science
  • National
  • Entertainment
  • Gaming
  • Movie
  • Music
  • Sports
  • Fashion
  • Lifestyle
  • Travel
  • Tech
  • Health
  • Food
  • Our Team
  • Contact
  • About
  • Privacy Policy

© 2020 The-Daily Buzz