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Owning a rental property means having a regular monthly income and being able to invest in other places with the freed up capital. However, it is important to enter the market with caution as it is easy to underestimate the expenditure required to fully set up your rental property investment. This piece takes a look at some pointers to keep in mind.
Understand your finances
“When you know your income and expenses, it becomes easier to get loans and invest in more rental properties” says the people at Home Builders Perth.  “In your calculations, don’t forget to include utilities, management, maintenance, insurance, taxes and reserves for major repairs”.
Understand vacancy rates in your area
Different areas have different vacancy rates. Talk to professionals to find out what the rate is for your target area. A rule of the thumb is to avoid investing in rental property in areas where the vacancy rate is higher than 5%.  Investing in areas with higher vacancy rates will turn you into a property babysitter.
Only invest in rental property in areas with great potential
The best rental properties can be found near academic settlements, major retail establishments, trendy interest points, transportation hubs and more.  Once you acquire property in this area and keep it in top shape, you are almost certain of a 100% occupancy rate.
Understand your potential tenants

Before you invest in the property, understand your target tenants. This way, you will be able to know what you can reasonably add to the property and increase the rent. This is important because it is not possible for you to change your target audience or demographic mid-way. You need to find out if existing tenants can pay a little more if you offer a better rental package than is already available.
Look beyond low interest rates
Buying property that is already 30 years old that would cost the same amount to build today is not a good investment idea. You need to ensure that the property has enough value to generate returns when it is time to sell the property.
Modern kitchens and bathrooms yield higher rent
Investing in quality fixtures in the bathroom and kitchen can allow you to increase your monthly rent by up to 10%. It is important, however, to ensure you get a fair price on your renovations.  Avoid using fixtures that will look out of place in the property during your renovations.
Tenant screening is vital
You need to have an application process for your rental property. This will allow you to confirm credit history, civil and criminal lawsuits situation, rent payment activities and more before accepting tenants.  The best property rental tenants are those that have been paying their bills for the last four years.
Rental property investment can be challenging but when approached correctly, it can be richly rewarding.