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Five Things (Beyond Rental Rates) to Evaluate in a Franklin Rental Property

Franklin Property Manager Evaluating a Rental PropertySuccessfully investing in rental properties requires a careful assessment process. Whereas rental rates are a vital part of analyzing any property’s potential, there are many things beyond rental rates that have to be taken into consideration as well. Profitable rental properties tend to share a number of common features, aspects that help maximize their value and earning potential. Beyond rental rates, the five most important things to look for in a rental property are appreciation potential, future development, property taxes, the number of rental listings in the area, and the local vacancy rate. By including these five things in your rental property search, you will boost your chances of having a successful rental property investment in Franklin.

Appreciation Potential

The current value of any potential investment property is at the top of the list for most investors. However, what is equally important is a property’s potential to appreciate over the long term. Real estate investment is designed to build wealth over the years, maybe even decades. Because of this, it is important to view potential investment properties through that point of view. Properties in areas that are growing or undergoing revitalization may be good candidates for strong appreciation in value, as are properties in areas that consistently offer good employment and other opportunities.

Future Development

The second important aspect to factor in when searching for a rental property is the area’s potential for development. An area with a lot of new construction may significantly impact existing property values, either by increasing or decreasing them. When considering a rental property, it is important to collect information about any plans to develop or renovate homes or other structures in neighboring areas.

Property Taxes

Along with the impact of future development, an area’s current and future property taxes are one more important thing to research. High property taxes are not an automatic reason not to buy the property, primarily if the house is located in an area that is in high demand. In the same manner, low property taxes may be a sign of declining property values or even a temporary feature, if the property is located in a developing area. In particular, homes that are situated in developing areas may encounter sharp increases in property taxes as the city or region requires more services to meet the needs of a growing population.

Area Rental Listings

The number of rental listings, regardless of which area, is an important aspect of assessing an investment property’s potential. On the off chance that the surrounding area has a high number of rental listings, this could be mean a strong seasonal cycle or maybe even evidence of a community in decline. The perfect rental property is located in an area with strong demand, which usually relates to a relatively low number of available listings at any given time. Regardless of the number of rental listings, it is important to study as much as you can about the area before pursuing an investment property there.

Vacancy Rates

In the same way that a high number of listings is a reason to investigate further, so are high vacancy rates in the area. The more rentals that are available, especially if the number of rentals has exceeded demand, the lower rents must be to attract quality tenants. If rental homes are standing empty for weeks or even months, that is a good sign of a saturated market. In contrast, low vacancy rates could correspond to higher rents, enabling you to maintain a profitable investment.

In Conclusion

When searching for investment properties, it’s essential to take a comprehensive view of each property’s potential. By including these five aspects of your search, you can more easily determine whether the rental property you are considering is right for you.

At Real Property Management Investor’s Choice, we have a dedicated crew of Franklin property managers who will help you with this determination process and make your search more efficient. Our professionals are available to assist real estate investors through an array of quality services, offering our market expertise and data to ensure that your next rental property will help you come one step closer to your long-term investing goals. For more information, contact us today!

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