Properties cost big money, making it a rather big risk for those with plan to roll with them. While it is a known fact that most property will yield returns, it is still a matter of when! The trick behind picking properties that are profitable for rental is to know what to look out for – and thanks to our experience in dealing with properties, we in Roomz have made a small but almost fail-proof list here to help newbies like you to find your first apartment or house to net a good start for your passive income.
#1 Location, Location, Location
This is certain – where the property located is pretty much the main factor in deciding whether it has high demand or would yield a high (and profitable) rental:
– Is it near to schools or colleges?
– Is the area or neighbourhood currently undergoing development and expecting growth?
– Is the location close to commercial and industrial areas where many people work?
– Does the house or apartment have access to public infrastructure?
– Which income group family/individuals would this property attract?
– What about public amenities and other facilities?
The ideal property for rental is one that is favoured by the middle income group, earning a monthly income of between RM4, 000 – RM20, 000, especially young and single adults. The second best option goes to college and university students. Bearing these in mind, it is best to eye on properties that are located near education institutions or workplaces, infrastructure hubs and in areas where development in booming (best if there are shopping districts, bars and cafes for people to have fun after a hard day at work!).
#2 Listing – Duh!
Another obvious but effective way of knowing whether an area or neighbourhood is profitable would be to look up on your potential competitors within that area. In other words, look up Roomz and other similar websites for other rental properties in the same neighbourhood and see whether they are doing well!
An area with a lot of listed properties for rent is often a safe indication that the place is in high demand (and high in competition, so you better buck up!). But if you want to be doubly sure, spend your time on those few extra clicks and pay attention to how recent were the listings – listings of units and houses with good property demand shouldn’t be hanging around for more than a few months (one and a half month if you are living in a bustling city) as they are often sought after and filled up by tenants in almost no time at all.
#3 Headlines Matter
Bad news to lazy folks, but doing homework helps – even when it comes to picking a good rental property. Unless the property you are eyeing on is located in a very remote location (which would make it a dubious location for rental), it shouldn’t take too much time and energy to skim through search engine results for news reports and articles related to economic, environmental and social concerns pertaining to the area or neighbourhood.
This should be able to give you a glimpse of various things, such as history, crime rates, risk of natural disasters and possible future developments that would further determine whether a given house or apartment in this location is profitable for renting.
Putting everything together, a good and profitable property is one that is located in a safe (low crime rate and almost zero risks for disasters such as floods and landslides) neighbourhood that is close to schools or workplaces as well as leisure areas, public amenities and public infrastructure.
Knowing which unit or home to pick to rent off is actually a task for a no-brainer, but only if you are skimping on your research. We hope that this article would get you ready and fired up to hunt for your first rental property – good luck out there!