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Purchasing property and becoming a landlord can be a highly successful and profitable business. It comes with many benefits, if carried out and managed correctly from the start. One of the most important factors is location, when it comes to real estate investing. Rochester NY, for example, has had a huge rental boom in the last few years because it offers an enviable standard of living, making it an attractive choice for a wide range of demographics. Rochester makes a great first place to invest for newcomers, however, no matter which city or town you choose, there are several red flags you should watch out for – and if you see these, proceed with caution and consider all your options carefully before making a decision. Structural Issues This is likely the most obvious problem you’ll encounter with a house, apartment, or commercial property. Issues within the foundations (such as cracks), leaks, termites and general water damage can cause a serious dent in your pocket if repairs are needed, especially as a first time investor. Although most of this should be picked up during the inspection, it is crucial to be vigilant and consider the implications – having too many potential repairs and maintenance issues can seriously impact your profits. Location As mentioned, location is perhaps the most vital element to consider. All renters, regardless of whether they are families or singles, are looking for convenience, safety, good neighbors, low crime, and things like proximity to transport and amenities. Poor or lacking infrastructure in an area is a massive red flag in terms of real estate investing. Rochester NY boasts consistent demand for quality rental properties because the city offers a modern, growing infrastructure. Unseen Problems There are some problems that can arise out of the blue, or when you least expect them — so they bear mentioning so you can stay alert. One of these is zoning laws, which outline the way in which a property can be used depending on whether it is commercial, residential or industrial. They also determine specific factors such as the height and density. This may not be a problem if the property requires no renovation, or it is in an established location, but if it does offer the potential for development or expansion, you will need to check the zoning regulations before proceeding. The numbers don’t make sense (costs to returns ratio) The cost to returns ratio is something you should pay close attention to. If a seller is demanding a high price for property that has been sitting on the market for quite some time, it’s likely not the best option to go for. You need to add up your outlay (including any fees), then calculate how much rent you can expect to charge for the property, then see that the numbers make sense — in other words, that you’ll be making a profit! To reduce the damage from any of these red flags (either being unaware of them or not knowing how to deal with them), it’s highly recommended that you work with a professional property management company. They will be able to guide you through the process right from the beginning, before you even consider making a purchase. Choose someone local to Rochester, as they will know the city and understand the ups and downs of its real estate market. Although it may sound daunting, it’s not all red flags when it comes to real estate investing! Rochester NY offers investors a huge range of opportunities. With the correct guidance and support, it can be a wonderful business endeavor to pursue. Author Plate Danny Torres is from Torres Turn Key, a property management company in Rochester NY with more than ten years’ experience dealing with both domestic and international clients. When it comes to real estate investing, Rochester NY can be an extremely profitable location. Providing a holistic service for both commercial and residential properties, Torres Turn Key brings together a host of experience and specialist knowledge.
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