It is profitable if you are thinking of buying rental property. Rental property means that you are investing in a property and then renting it to somebody else. The tenant will keep paying rent to the one owning the property. Owning rental property is helpful since it will help one take care of the loan and taxes of the property through the rent. But, one should buy such a rental property that will bring them profit and not loss.
Here are 10 Red flags to keep attention to while buying a rental property.
1. Bad Location
A bad location will bring in loss to the owner. If the location is set where there is no communication or less communication, no one will buy it. Also, before buying, one should see that there are shopping malls, grocery stores and enough space for a hot tub. If there aren’t any, one should avoid buying the rental property.
2. Damaged property
Damage property is an indication of a red flag. Signs may be roof leaks, broken pipes etc. These things will cost you a lot of money because it needs to be repaired. One should avoid properties that smell good because it might indicate that the one selling is trying to cover up an unpleasant smell.
The permits of the land or the property should be there. Permits like property papers, taxation papers, etc., should all be present. The absence of these can be suspicious because, without these, the property is illegal. Thus, one must verify the documents before buying a rental property. Otherwise, it can be problematic later.
4. It has been on sale for a long time
One buying the property should inquire as much as possible about it. Thus, if a property is on sale for a very long time, one should know the reason. There can be various legal problems, problems of the property being overpriced. Thus, it can cause problems later.
5. Bad schools
Bad schools in the area are one of the red flags an owner should avoid. No one will buy a property that has bad schools around. People look at the quality of the school district before buying. Bad schools also indicate poor quality of the environment. This will make many people back off from renting it. Thus it can be a loss to invest in the rental property.
The neighborhood should be taken into account while investing in a rental property. Bad neighborhood means a red flag. No one will rent a house if there are creepy people and robbers around who can take away your trampoline or even a bicycle. Also, one must see that the neighborhood has good lanes, parks, and playgrounds.
7. Drainage systems
A lousy drainage system means unhygienic and a red flag for the one buying the rental property. One must see to it that when they are purchasing a property, the drainage system of the colony is sound. Also, there should be waste bins in society, and it will help in maintaining society’s hygiene. Hygiene is essential these days. Thus one should avoid buying places where there is terrible hygiene.
8. Storage problems
If buying a house, to rent it out later, one must avoid the red flag of no storage. Lack of storage, like no garage, basements, or attics, can drive away tenants. A two- or a three-bedroom house, with a bathroom, with garden, garage, attic, the basement is what should be kept in mind while buying the house.
9. Wiring problem
Before buying a house, one should check that all the switches function correctly. Bad wiring is a red flag because one will be needing to fix the entire wiring system apart from buying the property. Thus, it will be safer to check the switches before buying the property.
10. Fresh paint and bug
A random fresh paint might indicate covering up cracked walls. One should inspect that, or it can cause more significant problems later. Also, one must see to it that there are no bugs like mice, cockroaches, etc. these indicate an unhygienic environment and will drive tenants away.
It is important to look into these points before investing in the rental property. Following these will prevent you from facing losses later.