When in the market for income property, there are many points to consider before signing a purchase agreement and committing to a years-long mortgage. But there is one item to always remember; you want an income property to function as a steady source of income.
To achieve a consistent income stream, factors such as curb appeal, cleanliness and proper maintenance are all obviously imperative, but there are many more issues at hand.
The neighborhood where the property sits is a huge contributing factor to the income stream reliability. These needs depend greatly on what kind of property it is. If it’s a residential property, considering the crime rate, quality of life, public school district and how well comparable properties are cared for all factor into your ability to find a worthy tenant.
If you intend to use the property for commercial retail, accessibility is the name of game along with proximity to other retailers- such as that of a retail district. If it’s a commercial industrial property, it may not seem as important as if it were a residential property, but this couldn’t be farther from the truth.
Just because industrial districts aren’t as dependent on aesthetics and quality of life doesn’t mean neighborhood is not important. Not only is accessibility by road potentially detrimental to your income stream, so too is accessibility to such shipping streams as ports and railroad.
As an investor planning to make money from rent, you want to be aware of how much you will be losing to taxes before signing on the dotted line. High property taxes may not always be a bad thing if the neighborhood is an excellent place for long-term tenants who love the safe area and great public schools. But for industrial or retail buildings, this could just translate as lost income. And regardless of the your intent with a potential property, you want to make sure it’s in a region with a stable economy and reliable job growth.