Investing in Rental Properties: What to Look For

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The number of single-family dwellings in the United States has been on the rise over the past few years. Yet, even though you will find a lot of houses across the nation, many homes are better rental properties than others. After all, there are many essential factors that make a successful rental property.

Indeed, there are many properties that can become difficult to rent, which causes long vacancy periods. By making the right choice, investment properties can become rewarding and exciting. However, besides these rewards, first-time investors in real estate can find the sector daunting. After all, real estate can be a challenging business with many landmines, which can adversely impact your returns.

For this reason and more, it is essential to conduct essential research before getting started. This allows you to understand the various perks and downsides of investing in real estate. With this in mind, this comprehensive guide will look at the various requirements to consider for a rental property. Keep reading!


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Top Requirements For Rental Properties

In this section, we will take a look at the top features of a rental property.


An influential factor that must be considered before considering a property is the neighborhood in which the property is located. After all, this determines the type of tenant that you attract, aside from the vacancy rate. For those who purchase near a college, for instance, there is a high probability that prospective tenants will mostly be students. As a result, filling vacancies every summer can prove quite difficult. You should also be aware of the fact that in some places, rental conversion is discouraged by imposing huge permit fees.

Property taxes

Homeowners are only capable of managing expenses to a certain extent. Property taxes are not easy to contain. As a result, they can consume a significant portion of the generated income. These property taxes are used to fund the operating budget, as well as other infrastructure projects for the city. As a result, it should not come as a surprise that certain places boast higher taxes than others. If you are looking for a state with low average property taxes, you should consider Nevada, Arizona, and Utah. Some of the highest property taxes in the United States are paid by real estate investors with properties in New Jersey, Connecticut, and Illinois.


It is safe to assume that all residents of a place require certain amenities for comfort. For a top culinary experience, top restaurants are needed. A place must have movie theaters and parks in order to promote its movie and outdoor scenery. Besides this, gyms and public transportation also attract renters. Therefore, you should take a guided tour of the neighborhood and look out for these amenities. You can visit city hall to get an idea of where you can find the right spot for commercial and private properties.


It is never a stretch to say that we all wish to live in a safe space, especially those raising a family. Indeed, no one wishes to reside close to a hot spot for vicious criminal activities. Crime is a major factor that discourages renters. You can visit the public library to find crime statistics for your neighborhood. You should also check if the crime rate in the neighborhood is rising or falling. Finally, you can also check the rate of police presence in the neighborhood.

Home features

You must note the difference between purchasing a residential house and a home for rent. In general, an average, decent home in the area will be perfect as a rental property. This is because it is neither more expensive nor less attractive than other nearby homes.

Take, for instance, if the majority of the houses in a neighborhood are 3-bath, 4-bedroom homes with a car garage, there is a fair chance that prospective renters in the area are looking for that. As a result, trying to purchase a 10-bedroom, 6-bath, 4,000-square-foot home for renting might be a bad idea. This is because renters might find it difficult to rent or maintain the property.

As an investor, you might find an average home unsuited to your personal preferences as a resident. Yet, taking your choice aside, purchasing a rental property that has average features will likely attract more tenants.

Risk of natural disasters

Another critical factor you must take into consideration. Insurance is an expense that must be subtracted from any returns generated by rental property. As a result, it is imperative to know how much this will cost. In a neighborhood that is susceptible to natural disasters, including flooding or earthquakes, insurance can significantly reduce the income you make from your property.

Job Market 

It is no secret that more tenants are attracted to areas with burgeoning employment opportunities. You can find job availability in an area by checking with or the U.S. Bureau of Labor Statistics (BLS). You can also visit a local library. Whenever a big company moves to a region, workers are more likely to consider it. For this reason, house prices fluctuate depending on the type of business involved.


If you are looking to purchase to boost your investment portfolio, then considering investment properties can be a wise option. However, certain factors must never be overlooked when renting a property. Before you purchase, make sure you check out the neighborhood’s amenities and livability. Then, you should research the average rent in the area. From there, you can work to determine whether it is financially feasible or not to invest in a rental property. A bit of research will also help you identify the key features you are looking for in your property. These include location, type, amenities, and size. If all of these criteria are met, then you can feel confident about the purchase.


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Marla Coffin

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