Navigating the Rental Market

By Domenick Tonacchio

Keep your goals in mind

• Investors should know why they’re in the rental market and what their goals are!

• If you want to live passively off the rental income, then you should know how much income you’ll need

Straighten out your finances• Knowing your exact income

and expenses will help you get loans and buy more property

• Learn financing and talk with mortgage brokers so you can buy the property at a good price

• Include taxes, insurance, maintenance, management, utilities and the reserves for any major repairs that could come up

Think about the! neighborhood

• Properties in bad areas require you to be a more active presence to make sure things operate smoothly

• Properties in nicer areas are more expensive, but also mean higher rents and more regular tenants

Look for properties with potential

• Properties near schools, expanding retail, trendy points of interest, local transportation or surrounding malls tend to have great potential

Keep your options open

• Consider smaller markets within secondary markets!

• Look at how well the house was built!• Compare how much people are

paying in the neighborhood for rent!• Look at prospective tenants!• Think about additions you can make

to reasonably increase your rent

Don’t be lured by low interest rates • If a property costs the same as when it

was built, then it’s not worth the money!• You want your home to have enough

value to get the returns you want when you sell

Renovate the kitchen and bathrooms

• A higher-quality kitchen and bathroom could increase the rent!

• Make sure you know how much renovations cost

Screen tenants

• Have an application progress and use services to look for civil and criminal lawsuits, recent collection activity and credit scores!

• The ideal tenant a good job, some savings and regularly pays their bills