So, you just obtained your real estate license in CA and are planning to buy a residential property for rental and increase your investment? You should know that investment possessions can be very exciting and rewarding, especially if you make the right choice.
However, if you are a first-time investor, know that investing in real estate in California can be overwhelming, even with rewards and income. It’s a crucial business, and real estate is a field showered with land mining that could affect your returns.
With that, you must do in-depth research on how the real estate industry works before diving in so that you will be aware of the advantages and disadvantages of investing in real estate.
In this article, you will learn some of the vital things to consider when you look for a residential property for renting purposes. Here we give you the list of features you need to note.
Things to Consider when Purchasing a Rental Property
Check out these features to consider when you buy a residential rental property:
1. The Kind of Neighborhood
First and foremost, you might want to consider the neighborhood where your property is located.
The neighborhood will know the tenants and attract the vacancy percentage.
If you intend to buy near universities, students will likely dominate your property, and it would be overwhelming on your part to fill the vacancies in the summer.
Also, you should be aware of other towns that try to daunt rental conversions through imposing permit fees and support on the red tape.
You should also consider the school’s ideal neighborhoods where you will buy the property. Consider the local school’s quality if you are dealing with like a size of family property.
Even if you’re concerned about the cash flow every month, the entire value of the rental property will always come into play, especially when you sell it. And if there are no excellent schools near the property, know that it could change the value of the investment.
Individuals with real estate license in CA or any state know the importance of safety in a property. Nobody desires to live next door to a spot where crimes usually happen.
Perhaps you may coordinate with the public library or local police for neighborhood crime statistics. Check on the crime rates for some serious and even petty crimes.
Never fail to recall to note if criminal activities are happening. You might also try to ask how frequently the police presence could be in the neighborhood.
4. Property Taxes
Property taxes will likely vary across the target area, and you may want to know how much you will lose. Know that high property taxes are not always bad, especially when living in a desirable neighborhood that attracts tenants.
However, there could be locations that have high taxes. With that, consider finding out the property tax increases that could be probable in the near future.
Before buying a residential property, look at the neighborhood and check the parks, gyms, public transportation, movie theaters, and all other amenities that would attract potential renters.
The city hall could also have that promotional literature which will give you the idea about where the best features and private properties are found.
6. Job Market
Places that come with an increased employment opportunity could attract lots of tenants. You have to find out how the specific area rates the availability of a job by visiting a library or checking the statistics.
Once there is an announcement about companies moving to areas, you can always be sure that workers looking for a place to live will flock to your property.
It may also cause housing prices to go up or down, which depends on the types of involved businesses. You may also assume that if you’d like a company in your backyard, the renters would want to do so.
7. Natural Disasters
Insurance could be another outlay you will deduct from the returns. That said, you must be aware and understand how much the insurance will cost. So, if the area is more susceptible to flooding or earthquakes, the insurance coverage will likely eat away at your income for rent.
8. Future Development
The municipality’s planning department should also have updates on the development of plans zoned into the area. If there’s a lot of construction, it’s usually a good place.
You have to watch out for plans and developments that could greatly affect the price of the properties nearby – where you will potentially buy. Also, if the plan is to have additional housing, know it could compete with your property.
Investing in a residential property in California is great as long as you get the real scoop. If you are a beginner, the ideal investment property would be a condominium or single-family home.
These are low-maintenance properties, and it’s nice to have an association that will take care of the external repairs and leaves you nothing to worry about. Hope these features will help you decide which residential property to buy in California. And don’t hesitate to consult individuals with real estate license in CA to help you decide.