One promising way to make money in today’s economy is to buy foreclosures or other homes, condos, and properties that you can rent out to a tenant. There are more and more renters in today’s market and a decreasing number of buyers, so the economics are on your side. In order to determine whether a property will be worth your investment as a landlord, you can follow the tips below.

First, calculate the loss from the property. This is the rent received minus depreciation, operating expenses, maintenance, and mortgage interest.

Next, make sure you purchase in a neighborhood that is appealing to the renter’s market. Depending on the area in which you’re looking, the market there may be primarily college students, families, blue collar workers, or otherwise.

If you’re purchasing in a college town like College Grove, then you could benefit by choosing condos or houses with multiple bedrooms and bathrooms. You can be less concerned with yard space and more worried about bathroom space.

On the other hand, a lower income area might see a lot of renters searching for smaller houses or apartments. An area with lots of schools might see renters who want well kept, single-family homes.

That said, any potential renter will want to live in a house in a nice area, close to jobs and shopping.

Remember that you will be responsible for most of the houses’ repairs, so inspect properties carefully before settling on a deal.

Check out local listings of properties to compares prices on buying and leasing those homes. When you decide to list your house for rent, you can start at a high price and lower it if the demand does not meet the price.

These days about 33 percent of the US population rents instead of owns a home. As interest rates get higher, renting no longer makes sense and the demand will go up, so that number will rise as well. That’s why in today’s market it’s a great idea to invest in potential rental homes.

Another reason to buy and then lease a home is the lease to buy option it allows. You can buy and hold a low price as the market appreciates. Once you finalize the deal, you’ll see a profit from the home’s value. You’ll also be able to profit by charging above the market price for monthly rent.

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This is filed under Real Estate Investors.

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