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There is a two-part process that experienced investors use when eyeing the best neighborhoods for rentals in the U.S. It can be harder for a new investor to know what is a good investment or not when it comes to evaluating neighborhoods. There are now some updated methods to use when learning to scout the best rentals.
Evaluating Successful Rental Neighborhoods
1. Review for Common Clues
A neighborhood that is thriving will often have few for sale signs. One thing that hurts property appraisals these days is the amount of homes for sale that are positioned in each neighborhood. Homes that are in good areas and have access to shopping, highways and airports are always a good investment.
2. Know the Educational Quality
Families or individuals who rent homes often seek neighborhoods that have good schools. Tougher standards are now in place in many of the cities across the country to boost the quality of educational institutions. Investors who are ready to buy in a certain neighborhood should always review school ratings to make sure that rent prices can justify the market offerings.
3. Validate Public Surroundings
The highest rental prices can be charged by rental home owners when a house is located in a growing metro area. Homes that are near well-manicured parts are often a good choice for investing. Easy access to public buildings is one of the things that potential renters will expect.
4. Speak to Neighbors
When scouting potential investment homes, speaking with neighbors who live near the property is a good move. This can provide a lot of information to gauge the history of each property. A long list of tenant turnover, drug activities or poor property upkeep will likely be noticed by neighbors. Getting the inside scoop about the real quality of the property is helpful.
Foreclosures Can Still Be Profitable
A degrading neighborhood today does not mean that a local economy will not improve. Getting the best price for an investment home is part of how profits are derived for investors. Buying a former foreclosure that has been turned into a lucrative investment property is still a good investment. Duval County in Florida has been a hot spot for investors and continues to have high cap rates.