Factors to Consider Before Investing in a Rental Property in Memphis

In 2013, a popular foreclosure-tracking firm in the United States conducted a survey. The goal of the survey was to rank the top 20 markets for investing in rental houses in the US. The results indicated that Memphis was at the top of the list and with a considerable margin. Even today, the city continues to be a lucrative destination for those looking to invest in small and big-sized rental homes. However, buying a second home for the purpose of long term investment could be a life-changing decision and must be approached with care and proactive planning.

Read on to find out what important factors must be considered before investing in a rental property.

The keyword is location

Experts from property investment companies in Memphis or from any other part of the world would suggest location as the foremost factor to consider while buying a home. Great location directly translates to 100% occupancy, higher rental rates and quicker return on investments. Properties located in prime areas also generate higher demand thus allowing owners to choose the most reliable clients for the timely payment of rent. In general, amenities like schools, hospitals, shopping and factors like low crime rate, easy access to public transport determine the value of a location.

Consider the renovation costs

A rental property that comes as a good deal may actually cover hidden costs in the form of a broken HVAC unit, damaged plumbing lines or floors. Have an expert professional to inspect the house and evaluate the potential expenses that could take away a major chunk of the budget. Rental properties must be maintained in good condition for a prolonged period in order to attract potential tenants. Therefore the cost of renovation while purchasing the home must be considered without compromise.

Perform a cost-benefits analysis

Most home owners will take out a home loan to buy a rental property. This can prove to be a good investment with many benefits. The key here is to perform a small cost-income calculation before making that huge decision. The rental income must not only cover the mortgage costs but also the unexpected expenses that incur with any property. For instance, minor issues like a small leak in the roof or a crack in the tiles are unavoidable and must be accounted for.

Talk to the investment company in advance

Most property investment companies will be able to brief the history of the rental property under examination. Buyers must gain sufficient information about the rental history of the property, the expected rental rate and the average time it has taken to bring in a new tenant in the past. Discussions with homeowners from the neighborhood can be an alternative to obtain such information. Following this, the current lease agreement must be studied and any unusual stipulations must be reviewed with the help of the real estate experts in the investment company.

By choosing one of the reliable and experienced investment companies in Memphis, potential buyers can ensure all these pointers are met without fail.

If you are looking for Memphis Tennessee investment properties, the author of this article recommends JK Homes.

If you are looking for Investment Companies in Memphis TN, then the author of this article recommends JK Homes.