For many of the property developers and others rental income is an interesting choice but a lot of thought has to be put before investing. Bad decision may come to bite you back. The initial step in buying a property for income is to analyze and analyze deeply the various factors. Here is a brief of all the factors to be considered before investing in real estate.
• Area: An important factor, for this will determine your target audience. For example if you’re buying a property near a university or college the primary renters are going to be students. These students cannot afford a posh area and a heavy rent. Another issue is you may face long vacancies as there will be periods of vacations. Therefore area has to be chosen after analyzing the local municipality, accessibility to important location and having wonderful growth behavior. Areas near IT corridors and Tech Parks are an interesting place to invest as there is a growing demand there.
• Taxes: Various property taxes are required to be paid and income tax generated from this income must also be paid. They have to be considered before investing as you cannot play a losing game. Make sure the rent from these areas should be enough for you to cover the taxes as well as leaves a decent amount behind.
• Accessibility and proximity: Preferably your tenants might be family people. These people have kids and proximity to educational institutions is preferred. Also supermarkets, hospitals, bus stands, airport, railway station are some of the areas which must be easily accessible.
• Building quality: This will speak a lot as nobody is willing to go into a bad home with foul environment even though everything mentioned above is there. Make sure your property is well fitted with desirable qualities.
• Rental amount: The most important of all factors. Price will determine a lot of aspects and determination of price will be based on the above factors. Negotiate a price that gives you steady income and it should neither be low nor be high.