There are many things to worry about when buying a house to rent. Most of the time, homeowners only take into consideration their future renters at the end of their purchase. Avoid this common mistake!
In the first stages of homeowning, there are a lot of things to consider, like what kind of house you'll buy, how you'll finance it, and many other financial aspects. What many future landlords fail to do is make these choices while thinking about their future renters' opinions and thoughts. After all, they will be the ones paying you, so you may want to please them.
For instance, you should pay attention to what kind of people you see in the neighborhood you're planning to buy a house in. Chances are, your future renters will be nearby. The key is to try to believe whether the house or apartment you've found will fit the needs of those who may rent it.
In this case, if you find that people in the neighborhood show signs of wealth, consider that they probably won't want to rent a place. Unless they move around much, which won't be an advantage for you as a landlord either, they're more likely to buy a house rather than rent it.
You also need to think about your future renter's purchasing power when choosing the type of building you'll buy. An apartment, a house, and a condo have very different expenses. Even though you'll have to cover some of these, there are others that will need to be shouldered by your renter. Do the maths to see if you'll make a profit despite these costs, without overwhelming the renter with over-the-top costs!
For example, condos aren't as beneficial for landlords as houses or apartments. The rapid increase in the number of them has lowered their stock value and they include many non-deductible fees that can't be passed on to renters most of the time. Even if you could, some may not be able to afford them, which makes finding a suitable renter a much harder task.
If you decide on a single-family home, remember to consider that the location fits your future renters’ needs! Think about what an average family wants in their vicinity: a grocery store, a school, a nice park… These are common elements that most families look for as they decide on a house to rent. They can tip the balance between your offer and another one!
A piece of further advice would be not to spend too much time on completely renovating a house. Upgrades and changes can cost you a lot of money, which you may not gain back with rent. Usually, people look for a place to live in with neatly painted walls and no holes in the floor, so simply stick to covering basic needs!