3 Tips for Choosing Sensical Rentals

by Tim DeBellis 10/10/2021

Photo by Photo Mix via Pixabay

For many investors, purchasing a property to rent out just makes sense. But finding properties that'll help you meet your long-term goals can be tricky. Whether you're considering a turnkey property or a property to rehab and rent yourself, keeping these tips in mind will help you weed out low-performers while you're hunting for a solid investment.

Tip 1: Run the Numbers 

For experienced investors, this is probably a no-brainer. For beginners, it's a smart reminder. When you're seriously considering any property, you need a solid expectation of the expenses associated with the property:

  • How much your mortgage will cost 
  • How much you'll pay in property tax and insurance 
  • Fees charged by a property management firm, if applicable 
  • HOA fees, if applicable 
  • Vacancy and repair costs 

Compare those numbers with the amount you can expect to receive in rental income each month. Ideally, you'll receive more each month than you'll be spending on the property. In some cases, a property might be worth purchasing even if you aren't going to pocket money each month. That comes down to your long-term goals and the market where you live. 

Tip 2: Buy in A Market You Know 

Though sometimes the best markets are far from home, and we'll the last to discourage investors from looking outside their own county, it's vital to understand the area. Some examples: 

  • College alumni might choose to buy near their alma mater
  • Retired or active duty military might choose to buy an investment property near a military base
  • Nurses might purchase an investment property catering to short-term nurses near their hospital 

If you're able to land an investment property in an area that caters to your niche, you'll already have valuable insight and an "in" when it comes to renting it out and understanding the real estate market in the area. Use your insight to give you an edge. 

Tip 3: Consider a Small Multi-Unit Property 

By purchasing a duplex, triplex, or quad you can live in, you can take advantage of an FHA mortgage--with its low down payment and interest rates--and secure a primary residence as well as a rental property (or two, or three). Although this type of investment can require more hassle, more tenant screenings, and more time in managing tenants and repairs, it can be a solid place to begin an investment portfolio. 

About the Author
Author

Tim DeBellis

Providing a low-stress and enjoyable real estate experience is just the beginning of the value I bring to the table for my clients. Drawing on over thirty five years of experience across a wide variety of industries, I combine my extensive knowledge and diverse set of skills with a life-long passion for real estate to help you successfully achieve your goals.

Achieving your real estate goals requires close collaboration with a knowledgeable and trusted agent coupled with a comprehensive support team. As your trusted agent, my primary objective is most importantly to understand your needs. From this essential understanding I then leverage my real estate knowledge and diverse set of skills acquired from working across industries including aerospace, higher education, healthcare, and management consulting, to design and execute a real estate plan that is uniquely tailored to your desired outcomes. I also bring with me the full capabilities, market knowledge, and global reach of the entire W Real Estate organization. The result is the most comprehensive and experienced real estate team dedicated to your success.

While I have lived throughout California for over thirty years, my husband and I, along with our two rescue dogs, have called Sonoma County our home for the past several years. My passion is and has always been residential home design. Additionally, I enjoy taking advantage of the local food scene, wine tasting, hiking the area parks, playing tennis, gardening, and simple backyard gatherings with friends.