One of the forms of investing in the real estate market - primary or secondary - may be buying flats with a view to renting them out later. Thanks to such investments, you can create a source of passive income that will feed your home budget, and the purchase of real estate itself will become a prospective investment. If we decide to buy an apartment for rent, we should know what issues we should pay attention to the most. How to choose the optimal apartment for rent to tenants?
The most important location
The main issue to consider when buying a rental apartment is the location of the property you are buying. It is also related to the chances of finding tenants in a given place. Location is important, but not only it should be taken into account when choosing the right apartment.
Therefore, the question arises where to buy the premises in order not to have problems with renting it in the future? You have the greatest chance of renting an apartment in academic cities, in the vicinity of student campuses and the universities themselves, but choose such an apartment if you do not really mind those students as renting out your property.
If you are targeting a different group of tenants, choose a slightly different location. Quiet, modern housing estates with good communication with the center in large cities, with well-developed infrastructure, are an ideal place to rent apartments for families with children. Wealthy singles and couples will be happy to live in prestigious locations in the city center.
Another issue is buying an apartment in a seaside resort or in the mountains and the decision to rent it for short-term tourists. This will require the owner's commitment and supervision of the entire investment on an ongoing basis. In addition, in this case, we take the risk that the apartment will be empty for some time, outside the holiday season or winter break.
The purchase price of the apartment
For the investor, it is one of the most important factors determining the profitability of an investment in an apartment for rent. It is best to buy a flat as cheaply as possible, but of a good standard at the same time. Buying a real estate in terrible condition, even at a reduced price, will entail the necessity to carry out a major, costly renovation of the property, which will strain our budget and make it necessary to wait until the necessary works are carried out.
In the case of equipped and renovated apartments and those coming from the primary market, the expenditure on their renovation, refreshment or purchase of furniture and necessary equipment for future tenants will be lower, but at the same time we will pay more for them. Therefore, the costs of both undertakings should be estimated and confronted with each other, calculating the potential rate of return on each investment.