Look at the price to rent ratio. Your property is a cash flow asset. Do a rent comparison as well as a price comparison when buying and factor in the cost of carrying the mortgage less the rental value of your property.
Are you comfortable carrying the difference? Dont make the assumption that rents will rise soon, it could be years before we see a strong rental market. When evaluating the rent range, be realistic. It can take time to rent and you may have to carry the whole payment until you find a qualified applicant.
Getting The Highest Rent
Location: Commands the higher rental value, but owners dont realize that its harder to rent a unit located in a beautiful, but more remote location. A beautiful unit just five minutes away from another, but up a hill and needing a car, will take longer to rent and often for less.
Maintain It: Proper upkeep will help maintain good rental cash flow. Sharper, well maintained units will get the better price and rent sooner.
Go Green: Install water and energy saving devices such as low flow toilets or programmable thermostats to lower operating costs and appeal to tenants.
Comps: Compare your units to rentals nearby. Factor in parking, washer/dryers, paint hardwood floors etc. If you price right, you will rent sooner.
Cost of waiting: Waiting to get the higher price may cost you a months rent. That means your unit has drawn 11 months of income rather than 12.
Security: Tenants prefer safety features such as cameras and alarms.
Offer Services: Contract with dry cleaners and other services to offer discounts. Washer Drywers, Microwaves and laundry facilities appeal to tenants and command a higher rent rate.
Staging: Paint and hardwood floors will pay for themselves as tenants look for bright and easier to clean attractive places to live.
There are two kinds of appreciation in property, there is property appreciation and rental appreciation. Be sure to evaluate both before buying.
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