Location, Location, Location
First thing I always look for before purchasing a property is the location. You want to make sure the property will either cash flow (good renters) or appreciate in value. Most important, you want to make sure you can sell it and this comes down to the location.
Here are some tips to look for:
-Is it near an industrial area, gas stations, strip bars, places that sell cannabis. All these are red flags and make the property more difficult to sell. The quality of the renter also goes down.
-Is it in a good area. Good schools nearby, parks. How many other rental properties are in the area or subsidized housing projects. If there are a lot of rental properties near you it could be a low-income area or a high crime area.
-Take a look at the industry in the city or town you are purchasing. Is it a growing area. Some small towns might rely on one industry to employ the people. What happens if the industry shuts down? A good example could be a car manufacturer.
- look for a good transit system, universities.
- Does the municipality support rental properties. Some towns will charge double the property tax or an annual renewal at the town which can add to your expenses. This can hurt your monthly cash flow.
-In the end you really must ask yourself will someone else buy this property. Why would they want to live here. The location does not have to be perfect, but you really want to make sure you can sell it even in a poor market when you want to.