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Buy Income Property |
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Determine Where to Buy Your Income Property
What City? - First, choose which city would make the best investment. Look for the following factors: · Potential Growth - Look for potential growth in demand, growth in population, growth in local jobs, growth in desirability, any type of growth that will add value to your property. · Property Taxes - Property taxes sometimes vary dramatically based on city limits. Find out and compare the tax rates in each city you are interested in before you get serious about buying. Work these numbers into your financial analysis. · Schools - Schools vary depending on location, and can change based on the city or even the neighborhood you choose. Young families that are moving to the area will be more attracted to homes that offer better schools. Research the school districts and find out which one's are ranked best before choosing the location to invest in. · Tax Breaks - Many cities offer tax breaks for certain types of houses, or for houses in particular neighborhoods. For example, historic houses often qualify for special grants or no-interest loans. Check with each city, state and county office to see what types of tax advantages may apply to you. What Neighborhood? - Next, narrow down the choices of the neighborhood you'd like to invest in: · Schools - Schools vary depending on location, and can change based on the city or even the neighborhood you choose. Young families that are moving to the area will be more attracted to homes that offer better schools. Research the school districts and find out which one's are ranked best before choosing the location to invest in. · Areas of Interest - Look for areas of interest that would attract potential renters, including shopping malls, restaurants, parks, theaters, churches, etc. The more there is to do in the neighborhood, the easier it will be to find tenants, and the more those tenants will be willing to pay. · Transportation - Look for properties that are close to as many forms of transportation as possible. Since renters are often starting out in their lives, it also makes sense to look for as much public transportation as possible. Find a neighborhood that is close to bus lines, train stops, highways and carpool stops. · Tax Breaks - Many cities offer tax breaks for certain types of houses, or for houses in particular neighborhoods. For example, historic houses often qualify for special grants or no-interest loans. Check with each city, state and county office to see what types of tax advantages may apply to you. Which Block? - Once you've narrowed down your search to one or more specific neighborhoods, begin comparing the potential properties based on their actual blocks. Look for blocks that have a lot of nice houses, or blocks that are undergoing updates and upgrades. It is best if you do not own the largest house on the block, as valuations are often compared to comparable sales on your block and having the largest house could actually decrease the valuation of your house. Also, look for blocks that have other attractions such as parks or that are on a cul de sac. The better a potential tenant feels about the block, the more he or she will pay in rent, and the easier it will be to rent out the place.
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