People like to live with other like-minded people, and it shows through neighborhoods. But in growing areas (read: hot real estate markets with long-term value), gentrification sometimes turns areas on their head.
The trendy markets explode into value while what were once middle-class neighborhoods can sometimes see a downswing in property values. This happens as new residents move in as they’re forced from gentrifying areas.
All in all, it’s difficult to imagine what a neighborhood will look like over the next twenty years. So it’s always best to buy rental property situated in the middle of several affluent neighborhoods.
The more well-off the neighbors, the better chance the area only sees property values increase.
Last but not least, each state and city has its own set of tenant’s and landlord’s rights that govern landlord-tenant interactions. Some areas favor the landlord, while others favor the tenant.
While we encourage you to avoid areas with over the top tenant rights (ie: the inability to evict squatters), most areas are reasonable. Though do ensure you’re aware of your own rights and the rights of your tenants.
Simple things like security deposit returns are often governed by a complex set of laws that can have serious financial implications if you fail to follow those laws.
Interested in Buying Rental Property?
Buying rental property isn’t for everyone, but for those interested in buying rental property, stick to this guide to ensure you’re making a wise investment. Done right, rental properties can help earn passive income with extremely low stress and risk.