Real estate is more than a fantastic place to stash your money for the future; it’s also a great way to generate rental income in the present. Turnkey investment properties are particularly attractive because they don’t require the time and expense of remodeling up front. As their name implies, turnkey properties are ready to rent right away.
Like any real estate investment, it takes a bit of research to find the best turnkey property at the most attractive price. You’ll also need to consider the property’s location. When purchasing a rental property, location is one of the most important factors that determines how well your investment will do – both in the short term and if you decide to sell it down the road.
What factors make a great rental property location? Here are a few that experienced investors consider before making a final choice.
In order for a rental property to be successful, it needs to stay rented out. For your property to be attractive to renters, it must be in a neighborhood where people want to live. This means having amenities like restaurants, grocery stores, and great shopping within walking distance or a short drive away. If you’re investing in an out-of-state turnkey property and aren’t familiar with the neighborhood, a quick stroll through Google maps can show you what’s in proximity.
Another thing renters look at when choosing a rental property location is whether there are good schools for their kids. As such, this should be a concern for you. Simply having a school nearby isn’t enough. Do a bit of digging to determine the quality of the school. If you’re hoping to rent (or eventually to sell) to a family with children, this will greatly affect the value of your investment.
When high-quality tenants search for a place to rent, they look for a great landlord and a nice property in a safe neighborhood. You can be the best landlord in the universe and have the most updated, beautiful property in the entire country, but if your tenants don’t feel safe coming or going from their home, they won’t stay. Before settling on a purchase, thoroughly check out the rental property location to ensure that the crime rate is low. This way, your renters will feel safe in their home.
Buying in an area with a healthy job market helps you in two ways. First, it can help you bring in and keep tenants. Second, it helps ensure that those tenants are reliable rent payers, as there is never a shortage of jobs in the area. A quick internet search will reveal all you need to know about the job market in any potential rental property location.
Finally, it’s time to crunch the numbers. What are the property tax rates where you’re thinking of buying? Are they so high that you’ll end up losing money on the investment? Also, look into the rental market to determine if you can charge enough to more than recoup your costs every month. Another number to consider is how many rentals are currently listed on the market in the area. A high number could indicate an unhealthy rental market and potential problems attracting tenants.
All of these data points are ones that you can research on your own, but an experienced turnkey investment company will have more in-depth knowledge of what area will work best for your specific budget and goals. With the facts and numbers firmly in hand, you’ll be able to determine if a rental property location means that you’ll be generating a healthy flow of passive income or struggling to stay afloat.