Finding a rental property to invest in can be a difficult process. Many factors go into your research process and everyone has different requirements/needs that have to be considered. However, there are universal ways to know if a rental property is a good or bad investment and key insights that every landlord should consider before purchasing a property. 



As a landlord, it can be easy to get trapped in the mindset of finding the perfect investment property. There is no perfect property, but there are properties worth investing in. There are a lot of ways to determine the value of an investment, and below are some of the best ways to ensure you find the best one.

Top 5 Rental Property Investment Tips

1. The One Percent Rule: This says that the property should rent for one percent of or more of its total upfront cost. This quick and efficient check will allow you to narrow down your list of properties to the one’s worth considering due to its potential value. - Forbes
2. Calculate the Cap Rate: The capitalization rate will give you a better look at the property’s potential for return on investment. To do this, you will divide the property’s net operating expenses by its purchase price. - Forbes
3. Inspect the condition of the property: If the property has been well-kept, you can be sure that potential tenants will be attracted to it. If there is a lack of curb appeal, it may not be a promising investment. However, a property left in poor condition could also work in your favor. You have the potential to negotiate the price of the property and receive a discount because of the work you will have to put into it. - Forbes
4. Compare the purchase price and the county appraisal value: You can find this information on the county appraisal district website. If you notice that the selling price is lower than the county’s value assessment, you will likely make a profit on the property. - Forbes
5. Do your research: You do not want to miss any piece of information on a property. Before making a decision such as purchasing a property, it is vital to know all of the details about the area the property is located, any past or current issues with the property, and the true value of your investment. 

At the end of the day, you want to feel confident you are putting your money into a property that holds value. You do not want to end up investing in a home that takes more than it gives back to you. Although that is not an exhaustive list of what you should pay attention to, those are great places to start. If you want to learn more, contact us with any questions you have!