Friday, 14 August 2009

• Strategic Real Estate Investing: Location & Signing a Lease Agreement

  How to Increase Your Chances of Signing a Lease Agreement When Buying a Rental Property– Part 1: Location

  Just because you own a shed zoned for multi-family dwelling doesn’t mean someone is going to sign a lease agreement to live there!

  Before you buy a rental property, there are many things to consider.  What you think could be a nice solid investment might actually drain your bank account quicker than a thief in the night.
  

  Some of the most important variables include: location, size & lay-out, amenities, the grounds, the market, your method of financing and the age of the property.

  In this 7-part series, I will take a brief look at each of these factors to get you up and running in your first rental property.  Hopefully, you’ll have someone begging to sign your lease agreement!

  Now, that we are finished with the introduction, let’s get right into it!

  Part 1: Location – How Do These Affect Your Chance of Getting a Lease Agreement Signed?

  Is it true that location is as important for a rental as it is for buying your own home?  Absolutely.

  The quality of your prospective tenant pool and the rate at which you’ll find a fantastic new renter are going to be majorly influenced by the location of your property.  Although in some cases it could prove favorable, do you want someone that stumbles across your rental while on a hunting expedition at night?  Uh, no.

  Let’s say you were shopping for your own home… you’d probably be drawn to a neighborhood with as few rentals as possible.  Why?  Because owner occupants generally take better care of their yards, enjoy quieter lives and usually have fewer cars in their driveways.

  So, wouldn’t it make sense that a renter would be attracted to that same type of environment?  Tenants enjoy the same things owners do.  An added bonus is that when it comes time to sell, you’ll get more for the house and it’s likely to sell much more quickly.
  

  But what about apartment complexes? You’ve seen complexes with four units all the way up to hundreds of units.

  If you purchase a 20-unit apartment complex in a neighborhood that has 30 similar 20-unit buildings, the chances of grabbing a good tenant aren't as good.  What would make your complex that much more intriguing that a tenant would sign your lease agreement?  Pretty much nothing.

  Generally, renters will know about this section of town (where the major apartment complexes are). But, usually they aren’t as intrigued by these areas.  When you find a neighborhood like this (filled with apartment complexes) it also means you are going to find one area filled with people, their cars, noise, babies and who knows what else?

  Additionally, your apartments will be competing with 600 other similar units making it harder to sell when the time comes.
  

  The best place for an apartment complex is in or near a neighborhood of predominantly single-family homes. This will help lower the area’s ‘population density’ and create a more attractive place to live.
  

  Additional variables that will make it easier for you to get a lease agreement signed:

  ·        Within a reasonable commuting distance to employment facilities

  ·        Decent access to highways and public transportation

  ·        Relatively close to shopping (groceries and other basics)

  ·        In a good school district

  ·        In a good looking neighborhood

  In part 2, we’ll take a look at the size and layout of your prospective rental property.

  Continue reading Part II: Rental Property Size & Layout
  

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