What to look for when buying a property for a high rental value

Among the various investment options that you can think of, buying a rental property might be one of the best options given its long-term profitability and return on investment. However, it may not be the easiest option, especially when it is your first investment in the real estate field, where choosing the right investment property is a key factor in getting the returns you desire.

One of the most important things that can help you choose the right investment property is researching the market that you are investing in and knowing more about the different factors that may affect the profitability of your investment positively and negatively. This article will make your job easier by highlighting the most important factors that you should consider when scouting for a new investment property.

You can start your search by considering these five elements before you decide on the investment property you want to buy:

1. The property location 
2. Property type
3. The neighborhood
4. High quality finishings
5. Building and facility management

Let’s tackle each one with more details: 

1. The property location

We all hear that the number one rule in real estate is location, location, and location. And it is not wrong. The location of your property determines a lot of things that play a direct role in the outcome of your investment. Any property value is affected directly by its location, whether it is a vibrant location close to key destinations or an upcoming area with potentials of growth that would affect the property valuation in the future. 

For the tenant, searching for a property to rent usually comes down to one main factor — convenience. The location of a property also has a lot to do with the type of tenants as well. If the location is close to a university your tenants are likely to be students, and if it is close to well-known schools you may find a lot of families interested in your property. This is helpful for you to know if your property would attract long or short-term tenants.

2. Property type

Given that Dubai is an active city and attracts a large number of expats for work, working individuals represent a large segment of those looking for homes for rent, especially in areas close to business centers. Therefore, small apartments represent a suitable option for investment in these areas as well as in areas near universities where small-sized properties are also suitable for students.

This does not mean that investing in residential properties with larger sizes suitable for families to live in is a bad idea, but then you need to make sure that the property will attract families with the availability of good schools, nurseries, clinics, hospitals, parks, or any other facilities that families need within the residential neighborhood.

3. The neighborhood

A good and well-maintained residential neighborhood represents a strong positive factor in attracting people to your unit as well as increasing its value. If you are looking for a place to live in, you will certainly be interested in knowing the kind of services provided and the availability of facilities like parks, shopping malls, restaurants etc. near your residence. This is what your tenants would be looking for as well.  

Don’t forget to consider the type of tenants you’re expecting for your rental property. If you’re expecting families to be your tenants make sure to do your research or go around the community to find out what kind of schools, nurseries, clinics or hospitals available in the neighborhood considering that this would be important for families as mentioned before.

High-quality finishings

Purchasing a property with a high-quality finish is another important factor in making your property valuation better, which will allow you to set a higher rate for your rental and increase the chances of leasing out the property for a long-term. The good finishes and elaborate decorations make the tenants want to stay in the house for longer and not think of moving to another place.

4. Building and facility management

Building and facilities management plays a big role in your peace of mind when it comes to your investment property. Good management saves you the need of worrying about a lot of things that may annoy the tenant and make them want to complain to you all the time, which can be stressful and daunting.

Keeping these factors in mind when browsing through the options you come across in the real estate market will allow you to better assess the property value and thus the return on investment it will provide you with.