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How to Choose the Next Rental Property to Invest In

As a beginner investor, you can’t help but feel pride and excitement knowing your first investment was a success. You’re making a little passive income while adding to your portfolio. But maybe you don’t want to stop at only one property. Perhaps you want to go the extra mile and invest in another. Excellent, as another investment means another page to add your portfolio. Though, you might be confused on how you can go about investing in another property, and that’s perfectly fine. Many newcomers aren’t too sure on how to go about investing into a second one. In this post, we’ll be going over how you can choose the next rental property to invest in.

Find a Suitable Location

Remember when you were scouring the internet for your first investment? The time has come to hit the real estate market again and see what’s available. The first thing you need to consider is choosing the location for your investment. A property could have every amenity you would want, but the location alone can make it completely moot. If a location isn’t up to par, then the building might not do very well for both the investor and the tenants. As you research, make sure to check the area surrounding the properties you’re interested in. Are they considered safe? What amenities are available? Are there local schools and shopping plazas? These are all factors you need to consider.

The Value

This is something that many new investors don’t think about at first; the current market value of a home can have a significant impact on how people think about it. It should be noted that it’s a total myth that a property has to be well beyond its value to attract clients. It’s true that renters and homebuyers want the most bang for their buck, but it doesn’t have to be outfitted with luxury furniture and appliances to see attention. Granted, it’s also worth noting that assessing the value of a home or a property isn’t as simple as you’d think. There’s a lot that goes into this process, so you’ll need to do your research. To give you a head start, try researching the various features people want to see in a property.

The Ratio of Vacancies to Occupancy

You might already have a general idea of this, but it cannot be stressed enough that if you want to build your real estate investment portfolio you must understand how important the ratio of vacancies to occupancies is. An apartment complex with too many vacancies can cause a lot of issues down the road. Newer buildings can get a slight pass as they do take a little time to see traction, which makes investing into them much easier. But for buildings that have been around for a while, too many vacancies are a clear sign that there are a few problems. You’ll want to stay away from them and continue searching. Even if the price is relatively low, always keep an open mind and consider why it’s that way. Investing isn’t something to take lightly regardless if real estate is considered to be one of the safest forms of it.

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