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If you are going to be your own property manager, look for a property that is within walking distance or a short drive from where you live now. This will make it easier for you to get to and from the property, especially if you have to deal with your tenants. You should also plan to visit your tenants on occasion to check in on them. Living close will make this easier. Looking for a property close to where you live now will also make it easier for you to assess the neighborhood and amenities, as you will know about them by living in the area. Amenities like a good school, a grocery store, a shopping mall, restaurants, movie theaters, and gyms are all a plus when looking for a rental property. Potential tenants may be more interested in living in an area that has a lot of amenities close by. It also makes the area more vibrant and welcoming, with a variety of services and entertainment to offer tenants. Try to look at properties that have at least 2-3 amenities within walking distance or a short drive away. Property taxes can be a major expense when owning a rental property, especially when you are already paying taxes on your current property. Research areas where taxes for rental properties are low or capped so they do not become too high for you to manage. Keep in mind you will have to offset the cost high property taxes by raising the rent for the property. This may turn potential tenants away, especially if the rent continues to go up so you can afford rising property tax. Search online for areas that are known to have a high crime rate and avoid them. Go for areas where crime is low and the neighborhood is considered safe to live in. You should also be wary of areas with a lot of vacancies or a high property turn over, as this can signal the area is not doing well or it is not a great place to live. In some areas, high vacancy rates can be seasonal, especially if the area is populated by a lot of university students. You should still avoid these areas, as a low vacancy rate will ensure the same people live in the area year round and the neighborhood is stable. Do a search of rental properties already in the area to determine how much rent costs. The average rent should be enough to cover your mortgage payment, taxes, and maintenance expenses. If not, keep looking until you find an area where the rent is enough to cover your expenses. You should also look at how the area is developing and whether there is a large gap in average rent costs. This may mean property taxes are going up and you may not be able to afford the rental property later on. This will help you get a sense of the neighborhood and the quality of life in the area. Knock on doors and introduce yourself as a prospective buyer of a property in the neighborhood. Ask renters and homeowners if they like living in the area and feel comfortable. Find out if they feel there are enough amenities in the area and if rent prices are reasonable. You can also ask homeowners about property taxes and whether they think their home was a good long-term investment.
Get a property close to where you live if you are going to manage it. Look for a property near amenities like a shopping area or a grocery store. Avoid properties in areas with high property taxes. Stay away from high crime or high vacancy areas. Research the average rent in the area. Talk to other renters or homeowners in the area.