First, you have to view the competitive landscape in town this season, which means doing some targeted research. You might start by attending local seminars or looking into an area property club. These types of groups can help arm you with the economic trends that will serve as a guide. You will also want to call one or two reputable local property management companies to get a general idea of the costs you should expect when listing homes for rent with their firms.
In today’s market, the demand for quality homes for rent and the rents they command are generally up. Given an increased demand for rental properties, it is reasonable to predict that even as a new investor you should be able to find qualified potential tenants within a reasonable timeframe. However, the tenant qualification process can be tricky. It is peppered with legal and Fair Housing rules, so you should be prepared to either educate yourself thoroughly on the laws or hire a professional property manager or leasing agent to handle this aspect.
Overall, the market in homes for rent has trended higher, but your new business will prosper or not based on the cash flow for the property type you choose to enter. Many neophyte real estate investors consider beginning with a condominium, and for practical reasons. Homes for rent can bring with them a multiplicity of unique –sometimes unexpected-- problems, whereas most condos come with HOAs that handle roof, exterior maintenance, and even many more problem-preventing features.
Experienced real estate agents are there to help you find prospective properties and to furnish professional advice along the way. Please feel free to call me anytime for market advice if you have ever considered looking into the local homes for rent market.