by Kathleen Couch

Created on: August 26, 2007   Last Updated: August 16, 2011

People need a place to live.  Some areas have more of a need for rental properties, than others. When jobs are available in a certain area, homes will be needed for those moving into the area, not just those already living in the area. If it is a "buyer's market" in real estate purchasing, it is a "renters market" in real estate renting for the renter.  When it is harder to sell properties, there is a larger need for rental homes.  When fewer people qualify for mortgage loans, they still want to live in a nice home.  Also, when many of the sellers must sell because of hardship, they will probably not be buying a home, but will be renting.

Investing in residential rental properties is the way many people have created wealth over time.  But, no one should think that it is without work, and sometimes aggravation.  Finding the right tenant, handling repairs, and evicting the tenant if they stop paying is all part of the work involved.

The following tips will help you make a good residential rental property decision.

1.  Location considerations are very important.  Do not invest in a property just because it is a really low price.  Most renters will have children, so choose a property in a good school district.  The neighborhood is important.  Is the neighborhood attractive, and neat?  A renter will not choose to live in a neighborhood that has a home that looks like a junk yard, any more than someone who would be purchasing.  Whether the property is located in an urban, suburban, or rural location will make a difference with how many people will be looking for that setting.  The suburban location outside a large town will probably be the most popular choice.

2.  The size of the lawn is an important consideration.  It should be of average size for your area. Do not choose an extremely large yard.  Renters do not want to spend all their time cutting the grass. Many renters want a fenced in back yard for their pets, and/or children.

3.  A typical neighborhood that is a good choice to have a rental home, is one that does not already have the majority of homes as rentals.  But, do not choose one that is in too much of an upscale area, because you will have fewer who will qualify to rent the home.  A midrange home in your area, usually is the best investment, and you will have the most amount of people interested in renting.

4.  The number of bedrooms should be at

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