You want to buy an investment rental property in New Jersey to boost your income, which is a good idea. An even better idea is getting the full picture of properties you consider.
See what Forbes lists as items to consider in rental properties. Understand how to make the most of your investment of time and money.
Take whatever monthly rent you estimate to make on your investment property and divide it by the cost of the home. If that equals 1%, then you can make a decent return on the property. If the figure does not equal at least 1%, then the property should at least be in an up-and-coming neighborhood where you can expect rental prices to increase in the coming years.
Of course, the rental property needs to be in good condition. Invest in a professional inspection so you know about all the property’s issues. Buying a house that needs some work is fine, but get a realistic idea of how long and how much money completing necessary upgrades and repairs costs.
If you have never owned an investment rental property, you may not realize how much time and energy your tenants and the property require. Consider working with a property management company to help with emergency repairs, unit maintenance and finding new tenants. Know that property management companies often charge about 10% of your monthly rent.
Do you see your ideal tenant enjoying your investment property’s neighborhood? Focus on area safety, local amenities and school districts.
Take your time before agreeing to buy an investment rental property. Knowing which questions to ask can better guarantee favorable results.