If you are looking to invest in residential real estate to rent out a property, there are many things you can do to contribute to its profitability. Your priorities when it comes to the property will differ depending on your target market, yet these are some standard ways to help get started.
Location is critical. Be sure to research the area in which you wish to purchase. Consider potential deterrents such as high crime rates, loud areas and a messy environment. Look for selling points such as good school districts, public transportation and close amenities. Decide who you want to attract to the property, consider what they would want and research these areas in depth.
Renovations may be needed. One thing that can dramatically increase the profitability of a rental property is if it is energy efficient. Having double pane windows, attic insulation and low-pressure taps/shower heads will make a massive difference in monthly energy bills.
After any main renovations, consider decorating. It is advisable to keep the color palette throughout a neutral shade and be consistent. Going for cream walls and wooden floors is a great option. A white bathroom with grey tiles is also a good choice. It will make the home look bright and clean and allow tenants to bring their own sense of style.
Whether to furnish the property or not depends on who you are targeting as tenants. For a family rental, they will most likely have their own furnishings. But for a vacation rental property, furnishings will be necessary. Also, a home with a pool is more likely to attract vacation renters than one without.
The smallest decisions could make your property much more profitable, so investing a bit more time and money from the beginning is a good idea in order to increase your monthly yield.