A bad rental property can effect not only your cash flow, but it can also take up valuable time. To ensure you are making knowledgeable decisions, our team of Tampa property management professionals recommend taking the time to learn as much possible about a property before investing. Below is a list of five items to pay special attention to before investing in Tampa rental properties.
1. LOCATION, LOCATION, LOCATION
One of the most important factors in the profitability of your rental property is the location. It is important to know what amenities are in the community of the rental property and in the surrounding areas. Recreational features like parks, malls, movie theaters, and restaurants are a huge determinant of the value of your investment and will play a crucial role in attracting the right types of tenants. Quality education in the area is also very important, but we recommend being wary of buying property in areas near college campuses. When renting to college students, you run the risk of high vacancies in between college semesters.
The location of your rental property will also play a huge role in your insurance premiums. If you are in an area that is prone to natural disasters, you may find it difficult to get coverage at a reasonable rate.
2. LOCAL JOB MARKET
A growing job market is a great indicator that you are searching for rental property in the right location. We recommend visiting the US Bureau of Labor and Statistics to stay up to date with job trends in the area of which the property is located. It is also important to stay up-to-date and knowledgeable of the locations where large employers may be moving to. Where there is job growth, there will be potential tenants searching for rental properties.
3. AVERAGE LOCAL RENTAL RATES
At the end of the day, purchasing rental property is about seeing a return on your investment. Make sure to research average rent in the area to ensure that you can charge enough rent to be profitable. Covering the cost of the mortgage is only one of the many expenses to consider. Also take into account other expenses associated with owning a rental property including property taxes, HOA and CDD fees, insurance premiums, and annual property maintenance costs.
4. TYPES OF REPAIRS
Purchasing a rental property that needs light repairs is a great opportunity to quickly increase the value of the property and generate a considerable profit. Things like painting the interior or exterior of the property, replacing a window, changing out flooring or carpet are all minor repairs that are worth taking the time to fix. We recommend staying away from major repairs, such as replacing existing plumbing, air conditioning systems, or roofing as these types of repairs will be more costly and can set you back financially.
5. GROWTH POTENTIAL OF AREA
Try to stay as knowledgeable as possible on current and future developments in the area of where you intend to invest. If you know that there is major construction under way for condominiums, housing development, or public amenities, there is a great chance purchasing a property in that area will be a good investment.
Don’t wait until after a purchase is made to discover what you are really buying. Ask the right questions before hand and use these tips from our experts in Tampa property management to make the best use of your financial resources.