Obtaining a Boston rental property can be a marvelous investment. Before you do, you need to know what to look for in a property, especially if you want a return on investment. Some single-family houses make better rental properties than others. You can evaluate the specific qualities of investment properties to identify which properties have profit potential. As soon as you identify a property that retains qualities of producing potential profit, consider that property a solid investment.
How to tell if an area is suitable for a rental property
One important quality of a rental property is its location. Usually, the more profitable rental homes are in growing real estate markets, where the demand for rental homes is strong. The property’s location will also specify your tenant pool and rental strategy.
Other signs to look for are a strong local job market, low crime rates, and future development plans. In as much as you can, find out for yourself about any nearby amenities, public transportation, and property features that might be trendy or in-demand. To maximize the return on your investment, study the structure and operation of the local market to gain a deeper understanding before deciding on anything.
When you think of a property’s location, think of the price. The ideal rental property should be within your budget, priced at or below the market rate. When calculating the property price, don’t forget to include things like closing costs, repairs, and insurance. When you’ve found a truly affordable rental property, you’ll know because you can pay for it and still have cash reserves left to spare.
However, the lowest-priced property doesn’t automatically mean it’s the best value. If the property is priced well below comparable properties in the area, you should look into it before deciding. You could have potentially found a magnificent bargain that gives you instant equity.
What’s a good monthly cash flow for rental properties?
Another significant detail to remember when choosing a rental property is cash flow. A good rental property will constantly provide a strong, positive cash flow. In short, you should earn a profit beyond your monthly property expenses. You’ll need to do a rental property analysis to determine whether a property will provide positive cash flow. Property-related expenses should always be noted, especially those that are often missed. After you’ve assessed all of the details of your rental property, if the cash flow remains positive, then the rental is almost certainly a good choice.
When calculating your expenses, it’s essential to factor in the repairs and maintenance costs. All single-family homes require ongoing maintenance and repairs. Be cautious of sellers who may conceal significant flaws in the property. If your rental property is distant from your home or lacks experience in remodeling and repairs, include property management costs in your calculations.
Whilst it’s a delightful thought to try and operate your own investment property, it is more sensible to hire a professional property management company, such as Real Property Management Commonwealth, to do it for you, especially when you’ve had no experience with managing details like this. Review all of the necessary information, like monthly fees and pertinent costs. Make it a point as well to add these to your budget.
Through these qualities, you can examine each property and identify which ones would make for a good investment.
Do you have your next rental home already? If so, make sure you get a good manager! Real Property Management Commonwealth is here to help! Contact us online or give us a call at 617-299-2342.
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