5 Things To Look For In A Rental Property

Published on Sep 9, 2022


Becoming a landlord is more work than just buying a home and then renting it out. For example, buying a home because it’s cheap doesn’t guarantee a good investment. There are concerns beyond the quality of the structure. If you buy a home in a city that is seeing local industries on the decline and as well as the population, the likelihood of turning a profit isn’t good. Here are a few things to consider when looking for an investment property: 

Zoning laws

Zoning laws can tell you a lot about the local housing supply and the ability to accommodate increased demand in the future. It’ll also tell you about the potential to add more units to your land. If a neighborhood is primarily single-family zoning, it isn’t likely to see a large influx of new housing units that could depress the rent you can collect. 

Beyond just the number of homes allowed on each lot, some other restrictions and regulations can effectively limit the number of homes built in a neighborhood. For example, construction height limits can restrict the number of apartments or condos built on a parcel. Parking minimums, setbacks, lot size requirements, and all these local regulations can significantly restrict the support of housing. If the supply remains low as the population increases, you will see rapid growth in revenue from rent. 

Local amenities 

People want to live nearby local entertainment districts. This doesn’t just mean nightlife. It means areas with public parks, restaurants, shops, coffee shops, museums, and theaters. Housing in and around neighborhoods rich in amenities is always in high demand. The popularity of some neighborhoods can change quickly depending on city planning, so keep an eye out for any plans that could change the desirability of a neighborhood. This can be as simple as a neighborhood building a new town square that will have food stands, restaurants, and shops. 

Local job market

Buying an investment property in a city or area that is heavily dependent on a handful of employers can be a risky endeavor. A city with a diversity of employers and industries will leave you less reliant on the success of a handful of employers or industries. You’ll also want to consider how volatile the industries are going to be in the future. You’ll be much better off investing in a property near a growing biotech industry as opposed to cryptocurrency. 


The lower the crime rate, the more you can charge for rent. That’s a pretty simple rule, but that doesn’t tell the complete story. Neighborhoods that attract tourists and locals because of the nightlife may see high crime rates as far as raw numbers go, but most of those can be due to alcohol and over-policing on weekends as opposed to crimes like breaking and entering or theft. Don’t just look at the raw numbers, instead, look into the types of crimes being reported. 

The home

Not everyone requires the same size home. Some tenants are single adults and only want one bedroom, while families may require three or four bedrooms. The supply of three-bedroom homes could exceed the local demand, while the supply of one-bedrooms could be lower than the demand. You can look to see local rent trends to see which type of home is seeing faster rates of rent increase as well as look into any municipal data that can tell you about the supply of homes in the area.

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