When in the market for income property, there are many points to consider before signing a purchase agreement and committing to a years-long mortgage. But there is one item to always remember: you want an income property to function as a steady source of income.
But how can you ensure that your property is offering reliable income? Read on to find out:
Keep up appearances
To achieve a consistent income stream, you obviously need consistent tenant occupancy. But to achieve this you must take into account such factors as curb appeal, cleanliness and proper maintenance. Treating your tenants’ units as you would your own is crucial to maintaining your income, but as a landlord, you are also legally required to do so. Therefore, making sure the property you’re considering is functional without requiring too much repair.
Look at the neighborhood
The neighborhood where the property sits is a huge contributing factor to the income stream reliability. If the property you’re considering is residential, researching the crime rate, quality of life, public school district and how well comparable properties are cared for all factor into your ability to find a worthy tenant.
Tax tradeoffs
As an investor planning to make money from rent, you want to be aware of how much you will be losing to taxes before signing on the dotted line. There are tradeoffs to paying high taxes, however. If your tenant is a parent who takes full advantage of the schools and subsequently an extended lease, then this is hardly lost income.
High property taxes may not always be a bad thing if the neighborhood is an excellent place for long-term tenants who love the safe area and great public schools. On the other hand, this may just be lost income if the tenant market consists only of young, single college-age students.
Navigating the real estate market can be complicated. Having a trusted real estate attorney by your side can help. Contact Aaron Cox Law today to learn more.