With a great deal of uncertainty surrounding the traditional forms of investment, more and more investors are contemplating putting their money in real estate properties. In particular, there are now a fair number of people who are investing in rental properties in the wake of reduced real estate property prices as a consequence of the 2008 global economic crisis. There are several considerations that are essential to investment in rental properties and we will cover some of those essentials in this short post. Here are tips investing into a good rental unit.
The first thing you need to remember with rental properties is to make sure that you get a landlord’s insurance and then require your tenants to get a renter’s insurance. A landlord’s insurance will allow you to determine the exact coverage of the policy needed to protect your property from any type of damage including those caused by the tenants. Consequently, a renter’s insurance is necessary to provide your tenants with protection against damage to their own properties that they maintain without your own rented property.
For this, you will need to evaluate the wide range of risk for which the property can be exposed to. In the case of severe natural of weather-based phenomena like floods, storms and water damage, tornado damage, or earthquake, a landlord’s insurance should be specifically tailored to the extent with which you want the property to be protected. Conversely, the equivalent renter’s insurance should also be sensitive to the same risks in order to protect the tenant from the same risks. Naturally, getting both is not an option but a requirement.
After this, you can begin assessing how best to position your property in response to specific market needs. For example, you can make it a short-term rental option for backpackers who would much rather prefer getting a fully-furnished home than an inconvenient hostel. You can also cater to a university population nearby by making it a student apartment making it more conducive for longer-term arrangements. You may also opt to make it a normal residential rental if your property is located in a suburb close to the local business or industrial district. These are considerations that can help put your property in the best position to capture a market which will keep it occupied for an extended period.
Like all other investments, the most crucial consideration is to make sure that your property is safe and in a position to earn for you. Think insurance and market position and you can never go wrong with embracing investments on rental properties.