Buying a rental property can be an excellent move to help build your property investment portfolio. There are, however, possible risks. You need to thoroughly evaluate a rental property before making a commitment.
You also need good information to make an informed decision. There are a few questions you should ask before buying any rental property.
In the modern property market, vague references to “average rentals” really aren’t good enough. You need hard figures and reliable sources of information.
Local real estate agents are experts in their rental markets. They are also market realists who can provide you with useful current information about rentals in the area and price trends.
Current market information is critical. This is the best way to track rental values in real time.
Rental Property Questions
Now that you know the market basics, you can focus on the property itself. These are the questions you need to ask:
How old is the property? Older properties may need significant outlay to bring them up to scratch and make them competitive in the rental market
When was the property last painted? Exterior and interior presentation makes a big difference in the rental market; a good-looking property will rent more quickly than a shabby looking property. Are you prepared to pay extra for painting?
Has the property recently had an electrical safety/plumbing inspection? If not, you may need one, particularly for an older property. Electrical expenses and plumbing work can also cost big money.
What is the current rental? Compare this price to your information regarding market prices. Significantly lower prices are usually an indicator of a low-quality investment property.
Any history of P? Unfortunately all too common, like everything else do your research and don’t rely on third party reports….do your own.
Ask iLender about Rental Properties
At iLender, we’re experts in all forms of property investment in New Zealand. We can help you with property evaluations and any expertise you need to find the right rental property for you. Call us on 0800 536 337 and ask for any assistance and professional guidance you may require.