How To Look for Investment Potential in Burbank Properties
Burbank properties are a great way to create a new cash stream. After the tenant pays the rent, you can use the money to pay off the mortgage and maybe still have a little extra for yourself. Investment properties near cities and in college towns can be great investments because there are so many renters.
Interested in looking for investment potential in Burbank properties? Here is our essential guide to finding the right investment property.
Investigate the Job Market
Does your city have a major hospital or university? How about a thriving downtown area? If you look at the job market in your area, you’ll find where most of the people in the city are working. They’ll want to be close to their work so choosing a rental property near by will almost guarantee renters.
Identify Good School Districts
If you’re looking for a single family home or 3-bedroom apartment to rent out, then choosing a good school district might help bring in long-term renters. Parents don’t like to move their kids from school to school, so if they can find a home in the school district they like, chances are they’ll be looking to stay long term.
These Burbank properties are also usually worth a bit more. Parents are often willing to pay a higher price to live in a good school district.
Search Near and in Urban Areas
Big cities usually mean plenty of jobs and fun. Because the homes are usually more expensive to buy, people often want to rent rather than buy. As a landlord, that’s a good thing for you.
If your Burbank property is located near great restaurants, shopping districts and public transportation, then you’ll almost always have a stream of interested renters. A convenient location often means more to renters than other amenities.
Reach Out to Pros
When buying a rental property, you’ll need three professionals in your corner: a realtor, a property management company and a general contractor. All three will help you understand how much it will cost to buy a property and keep it maintained while still making money. Having all three working for you can help you avoid fixer uppers with major issues,
Investigate Zoning Laws
In some areas, homes cannot be rented out. If you buy a property in these zones and don’t check the laws, then you may be stuck until you can resell the property.
Always do your homework before buying. Make sure you can rent a property before you buy it.
Figure Out the Math
When calculating how much it will cost to own a rental property versus home much income the property will bring in, there are a few ways to do it. Remember to always check the rental values of similar Burbank homes in similar locations to get an idea about what your rent will be.
- The 50 Percent Route: The mortgage payment should not exceed 50 percent of the rent. That doesn’t include insurance and taxes, but it the mortgage is more than half the rent, then you probably won’t make a profit.
- The 1 Percent Route: If the rent is equal to or exceeds 1 percent of the cost to buy the property, then it’s worth at least investigating.