Are you thinking about leasing your San Diego rental property? Doing so can be a very profitable endeavor, especially in San Diego County. In fact, if you're already a real estate investor, then you may want to invest in another property. Rental properties can be a great source of steady income, after all.
However, the ability to make money on your property will depend heavily on whether or not it's a good rental property. What exactly does this mean? There are a number of factors that determine whether a rental property is good or not. The following are some criteria to keep in mind:
- Neighborhood - The San Diego neighborhood location greatly affects its value as a rental property. For example, if the neighborhood is located near a university, then there's a good chance that your tenants will most likely be younger and there will be a greater turnover rate. However, if you're in a desirable neighborhood with very few rental properties, you're likely to be a competitive property that can command a higher rental price. If you're located in a popular vacation destination, such as Pacific Beach, it may be good to invest in a San Diego vacation home.
- Location - Is the property in the city like Downtown San Diego,a suburb like Mira Mesa, or a more rural area? If property is in the city, then things like traffic and parking (or lack thereof) could affect how attractive the property is to potential residents. However, if it's located in a rural area, you'll have a more difficult time attracting residents who work in the city unless they are looking to live in a quiet, private area. The greater San Diego area has a diverse amount of locations, and knowing the intricacies of them is important to understanding your investment property.
- Local job market - The local economy is tied very closely to the real estate rental market. If the local job market is thriving, you'll have a better chance at filling a vacant property since the area will be attracting more job seekers, whereas a poor job market won't draw nearly as many new potential tenants to your San Diego rental. The local economy is tied very closely to the real estate rental market.
- Homeowners Associations (HOA) – Is your rental property located in an HOA? If yes, you will need to take into account the HOA dues. Also, you will want to make sure there are no rental restrictions in the community’s covenants, conditions and restrictions (CC&Rs).
- Local schools - Families looking to lease a single family home in are going to be doing research on the area's schools. If the property you are leasing is located in a school district with poor ratings, your investment property may not be as attractive for families. On the other hand, if the property is in a school district with high ratings, you will have more interested families come to look at your property and may be able to increase the rent.
- Crime rate in the area - A high crime rate will not only deter families, but it will bring the value of your investment property down. Don't just check the current crime rates, look to see if the crime rate in the area has risen over the last few years. If it's increasing every year, there's a chance that it will only get worse in the future. This has an adverse affect on how much you can make in rent on your property.
- Rent in the area - Do a little research to see how much other properties are charging for rent in the area. The rent you charge will need to be comparable to the rent other property owners are charging - and if it's not going to cover mortgage costs, property taxes, maintenance costs and all other property ownership costs, then it might not be a great investment property.
- Amenities - Potential residents care about the amenities in the area. Amenities they will look for include nearby major roads, grocery stores, gas stations, banks, a post office, restaurants and shopping options. Nearby public transportation and parks are big perks as well. As a rental property owner, being aware of these amenities are a key selling point to future tenants.
- Future development - Find out about future development in your San Diego area. If a shopping mall is going to be built within a few blocks, then the area is going to become congested with traffic in the future. If the city is planning on building a freeway across the street from the property, the investment property's value is going to plummet and it's going to be tough to find new tenants. This will definitely affect your decision to lease or sell your property.
- The property itself - A rundown investment property is going to require a lot of remodeling. But the condition of the property isn't the only thing to consider. The number of bedrooms and bathrooms are important as well - as is the layout of the family home. If the kitchen is on the second floor and there's only one bathroom that happens to be in the garage, then you're going to have some issues finding tenants who are willing to put up with this.
As you can guess, it takes a lot of looking to find the perfect rental property. But it takes even more to manage it. Consider hiring a full-service property management company to handle everything involved in leasing your property, from marketing to payment collection and asset management. PropertyADVANTAGE is a residential property management company working to offer our clients the best service. If you're interested in hiring a property management company for your rental property, contact us at Property Advantage for information about our full-service property management services today.