Profitable Rental Property For You

Investing in rental property is a tough decision. There are many factors to consider whether or not to purchase a rental property.

The purchase of a rental property can be a disaster if the proper research is not done before buying. A landlord can have trouble attracting tenants or re-selling if need be.

The first thing a buyer of rental property should examine is the neighbourhood. The neighbourhood will be a huge factor in a decision that prospective tenants will make. If the area is unclean and is not close to anything they might need, a tenant will be less like to rent from that landlord. In Fredericton, there is a large body of students that live in the area. This means a landlord will likely rent to a student. This renting style fluctuates and a landlord should be prepared for that. Year long leases are best to consider in this case, that way a tenant has to pay for the full year.

A landlord will have to pay property taxes on owned property; it’s that varies from province to province. A landlord should assess his rent based on how much money they will lose in taxes. If the neighbourhood is high quality and it’s great for long-term tenants, the investment could be worth it.  But the landlord can always find tax information at the local governmental office and weigh their options.

Prospective tenants might have children. As a landlord, it’s important to consider local schools. Good schools in great neighbourhoods can be detrimental to parents who are new to a city. If a school has a poor reputation then it can also decrease the value of your property, making it hard to sell [or rent] later on.

It’s also a good idea for the landlord to check on the criminal activity in the area. Nobody wants to live in an area where crime is prevalent. Fredericton has a local crime map that can help you determine areas where crimes occur in a given month. This can help avoid purchasing properties in those areas. High crime areas will decrease the value of a property and a landlord would have to severely decrease their rent.

Landlords should also inquire about the job market in a given area. Many people who move to different cities will want areas that are rich in employment. Obviously, a sole landlord can not predict the job market, however investing at peak employment times might be better than others.

Amenities are things that bring value to the property but are not directly associated with it. For example, one of CanStar’s properties is located close to Queen Square park. A hub of outdoor and indoor activity. Perfect for active individuals and families. Such an amenity brings value to our property and makes it easier to rent.

A landlord should also look at building permits and future development in a given area. Building permits and future development will mean that the area is growing. For many people, this has appeal and means prosperous growth for the future and possibly more investment. Construction noise will turn off tenants. They will rent somewhere else.

Watch out for vacancies or for rent signs in various areas. An area that has large amounts of vacancies can mean the area has dried up or lacks the worth for investing. This will also help provide an idea of how easily it could be to attract a tenant.

Rent — the way you will make most of your investment back. Find out what the average rent is for that area. Then, you weigh it against upkeep cost. Also take into consideration any borrowed money and the cost associated with paying back that loan. It is both important to be fair and realistic with your rent. Otherwise, high rent will deter tenants from renting.

Lastly, consider the weather patterns. If an area is prone to flooding or natural disasters, consider insuring the place for those reasons and include in the upfront cost of the rent. It may decrease the value of your property, but ensuring tenants with insurance can make a lot of difference.