If you’re thinking about buying a property to rent, one of the biggest questions you should ask isn’t simply, “Can I afford this house?”
The better question is:
“Will this make a good rental property?”
Not every house makes a great rental. A property can look like a great deal on paper and still be difficult to rent, expensive to maintain, or challenging to manage.
At A+ Property Management, we work with property owners who are looking to make smart, long-term decisions with their rental properties. While every investment is different, there are a few fundamentals we believe are worth considering.
1. Location
You’ve probably heard the saying that real estate is all about location. When it comes to rental property, there’s a lot of truth to it.
Renters care about where a property is located and how convenient it is for their daily lives.
Things like proximity to schools, employment centers, shopping, restaurants, parks, major roads, and other amenities can all influence demand.
In East Tennessee, that might mean looking at how convenient a property is to Knoxville, Maryville, Alcoa, Oak Ridge, or other major employment and activity centers.
A beautiful house in an inconvenient location can be harder to rent than a more modest property in a highly desirable area.
When evaluating a rental, don’t just look at the house. Look at the neighborhood.
2. Price
The purchase price matters—but it’s not the only number you should be looking at.
You need to consider the property’s potential rental income alongside expenses such as taxes, insurance, maintenance, vacancy, and property management.
A property that seems inexpensive isn’t necessarily a good investment if it requires significant repairs or produces limited rental income.
Likewise, a more expensive property may make sense if it is located in an area with strong rental demand and can generate reliable income.
The goal isn’t necessarily to find the cheapest property.
The goal is to find a property where the numbers make sense.
3. Size
Size matters, but bigger isn’t always better.
A larger property can potentially command more rent, but it can also come with higher maintenance costs, higher utility expenses, and a smaller pool of renters who can afford it.
Think about who your ideal tenant is.
Is the property likely to appeal to a single professional? A couple? A family? Roommates?
Understanding your potential renter can help you determine what size and type of property makes the most sense.
4. Layout
One thing that can easily get overlooked when buying a rental is the layout.
Two homes can have nearly identical square footage but perform very differently as rentals.
A functional floor plan can make a property feel larger and more comfortable. Bedrooms that offer privacy, adequate storage, usable living areas, and practical kitchen and bathroom layouts can all make a difference.
Think about how someone will actually live in the home.
Would you want to live there?
That doesn’t mean a rental needs to be a luxury property. It means the home should be functional, comfortable, and appealing to the type of tenant you’re trying to attract.
Look at the Property as an Investment
Ultimately, buying a rental property is different from buying a home purely for yourself.
You may love the countertops, paint color, or backyard—but your personal preferences aren’t necessarily what determines whether the property will perform well as a rental.
Look at the property through the eyes of both the tenant and the investor.
Ask:
- Is the location desirable?
- Does the purchase price make sense?
- What could the property realistically rent for?
- Is the size appropriate for the market?
- Is the layout functional?
- What will maintenance and operating expenses look like?
- Is there enough demand for this type of property?
The more questions you answer before buying, the fewer surprises you may have later.
Thinking About Buying a Rental Property?
A good rental property can be a powerful long-term investment, but finding the right one requires more than simply finding a house for sale.
At A+ Property Management, we work with rental property owners throughout East Tennessee and understand the day-to-day realities that come with owning investment property.
If you’re considering purchasing a rental property and don’t know where to start, we’d be happy to have a conversation.
A good investment starts with a good property—and a good plan.