Buying income properties can be difficult. There is a lot to know before choosing a potential Dawsonville single-family rental home. It’s not all obvious for first-time investors. The price of the property is really a key piece of information to have, but that doesn’t mean that it is the most important one. Really, the top four features to watch for in a great income property are property taxes, rental rates, future development, and vacancies. By information gathering and researching these four areas, you can better narrow your property search down to a shorter list, and from that list, select the most profitable options.
Property Taxes
The cost of an income property begins with the sales price but certainly doesn’t end there. Experienced investors are aware that ongoing expenses such as property taxes can impact the long-term profitability of your rental home. Property taxes vary widely from town to town, and sometimes even neighborhood to neighborhood. It’s crucial that you get the accurate property tax numbers for the exact property you want to buy before making your offer. Most municipalities have an assessment office with tax information on file, with many of them already offering this information online. Other local news should also be checked carefully for any hints of a property tax increase in the near future. Despite high property taxes not always being a bad thing, they might be indicative of investment concerns, especially in areas that appeal to potential long-term residents.
Rental Rates
In-Depth knowledge of rental rates in your area is key to choosing which property to invest in. Also, another pertinent detail is how property taxes affect your chosen investment. Investing in a property requires a lot of planning and foresight. One of the many things to consider before making a decision is to know how much it will cost you. Hence, it is essential that you know what the average rental rate in the area is. You can accomplish this through a thorough marketing analysis. Refer to the data yielded by the analysis to help you assess whether your expected rate will cover your costs, including the mortgage payment, taxes, and maintenance. When dealing with property taxes, it’s best to gauge where the rental rates in the neighborhood may be headed moving forward. Looking at the recent past may help, as will staying on top of local development projects or shifts in demographics.
Future Development
Stay on top of things by being proactive: gather data on property taxes and rentals, and do your research on any plans for future development in the area. For the most part, the municipal planning department in your area will have helpful information on any new zoning and development plans. Look around the neighborhood and nearby areas for any signs of ongoing construction. This indicates development in the area. If a lot of building is underway, that may be a sign of an area experiencing strong growth. Make sure to be aware of any new housing developments, which could potentially lower property values for residences within the area. More investors and builders are putting brand new homes on the rental market which could eventually wind up being your competition.
Vacancies
And, the last thing you need to know is the number of listings and vacancies in your chosen location. Gaining knowledge of this will ultimately help you choose which investment properties to buy. Don’t fret if you notice a high number of rental homes; that isn’t necessarily a sign of trouble, for as long as the number of vacancies in that same area is relatively low. Still, should you find that the number of unrented properties in that area is unusually high, that might be suggestive of a neighborhood in decline. As long as there are a lot of vacancies, the lower rents will go as landlords compete for tenants. You could even lose money if your rental rate dips below your ongoing expenses.
In Conclusion
While doing research on every potential income property is a lot of work, Real Property Management Stellar can help lighten your load. We offer free rental property analyses for investors, which can help you more easily identify whether the income property you want to buy is a profitable option. Contact us online or call us at 706-864-5456 to learn more!
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