Are you getting into purchasing real estate to use for investment purposes? Doing so requires looking at homes in totally different ways since your goal is to rent one out instead of making it your forever home. Here are some things to pay attention to when looking at potential properties. 

1. What Kind of Repairs Are Necessary?

It's always worth noting what kind of repairs will be necessary to get the home in a place that's good enough to rent it out. A home that needs a bit of work can definitely be purchased at a good price, but you do not want a home that is going to be so much work that it will be difficult to make a return on your investment.

For example, are the things that need repair structural or cosmetics? A home with a damaged foundation could end up being a money pit since it is necessary to repair them. However, a home that looks run down with overgrown shrubs and poor landscaping is much easier to fix. 

2. What Area Is It In?

You want to buy a home that is in an area that's up and coming, so that you can buy the home at an affordable price and hope that it increases in value as the area becomes more popular. While you can buy in a hot spot, know that you'll be paying for it immediately, and it will make it harder to make money on your investment as a result. Search out those areas that are definitely trending upward in popularity. Not only will it make it easier to find tenants down the road, but it will help justify the cost of rent that you charge later.

3. Who Will Be Your Renter? 

Always ask yourself who you are finding to be the renter for your property, and if the home will meet those person's needs. For example, if your small rental property is in a trendy part of town, start looking for unmarried or child-free buyers who aren't concerned about school districts. If the house is bigger, in the suburbs, and has multiple bedrooms, the home may attract a family that does pay attention to school districts. The renter you are attracting plays a big role in if the home will match the area it's in for rental purposes. 

To learn more about this process, contact local real estate agents.

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