Updated June 9th, 2020
In a still-hot real estate market, owning and renting property to tenants can be very lucrative. But without the proper tools to research different properties in the areas you're considering, you can end up with more work than it's worth.
With a comprehensive report, like an address rent report, you can get tons of information on a prospective property and have a clear picture of the rental market. There are some considerations to make before buying a home purely for rental purposes, but with just a little help, you can see a reasonably quick return on your real estate investment.
Three things to consider when looking for a rental property
Is the Rental Market Still Hot?
At the highest rate in the United States in 50 years, 36% of homes are occupied by renters. And in cities with a lot of growth and a housing market that can't keep up, renting is the only option. With that in mind, the rental market is still very viable.
Mortgage companies try to dissuade renters by talking about homeownership perks (e.g., "stop paying someone else's rent"). While there are perks of homeownership, of course, renting is still the best option for many people. Not everyone can qualify for a mortgage loan.
So even in a down market, rentals will be in demand. Many people like the freedom to travel or change locations for their jobs. Some people prefer having someone else take care of their maintenance. Depending on situations, not everyone can afford to pay the home payment, taxes, insurance, and maintenance you need to do when you own the home.
How to Find the Best Rental Properties?
There are a lot of rental property apps, but not all of them will give you the complete picture of a property before buying. You want to know the market, financially, but you also want to understand the neighborhood beyond just financial demographics. A rental rate calculator is a great tool, but it's also great to project the value of property in an area in a few years by looking at historical and other city-data.
It's also useful to find a landlord app that you can use on a mobile device since much of the landlord's work is done on-the-go. And having a way to analyze multiple properties at once (batch analysis) is an incredible time-saver.
Partnering with a local realtor or property management company can also help if you live outside the area. They have their finger on the pulse of the local market and can share information with you.
Good things to know that you wouldn't if your analysis is solely based on a rental report:
• How diverse is the employment market?
• Who are the largest employers?
• How are those industries doing?
• Have there been massive layoffs?
• Does is there a predicted turn around?
While none of these will give you your final answer for analysis, put together with a rental rate evaluator, landlord app, helpful advice from local realtors and property managers, you can make an educated decision to purchase in that area.
How to Find the Most Relevant Data?
Most real estate search tools can tell you how to estimate the rent for a property. But it's important to find one that will give you all of the data that will be relevant to you and your future tenants. Schools, transportation, and commute and crime data help inform the best decision-making and can help ensure that you list the most appealing, relevant, and accurate information possible. An address rent report is only as useful as the rest of its correlating data.
Great Schools is a free website that will give you a ranking of schools in your search area. It also has reviews from teachers, parents, and students who are helpful for an insider's view.
Walk Score is another free website that will give you a walkability score of the neighborhood based on crime, transportation options, shopping, amenities, schools, and nearby hospitals. It is a good way to get a feel for a community where you've never been.
Investing in real estate is a good idea. With the exponential growth in many cities throughout the United States, rental properties are often the only option for affordable housing. By utilizing a useful address rent report (with supporting neighborhood data in a reliable and comprehensive real estate tool), you can ensure that you're investing in the best properties and get the most in return.
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