The buy-rent strategy, or buying a secondary home to generate rental income while living in your primary residence, has long been considered an investment strategy with strong benefits. However, rising property prices have limited the number of potential homes that can serve as effective investments. Here are 5 Things to Look For In Investment Properties:

• Location. The property should be as close as possible to a transit station or major bus stop, as this will encourage renters to commute from further away. This means that the tenants may have more disposable income and can likely afford to pay more rent.
• Size. A smaller home with a higher yield is often a better investment than a large home with a low return on your money. It’s always better to buy small, especially if you’re going for an older house – they cost less and are easier on your budget. A quick way of working out the best size is by using “rent per square foot” (the yield). Simply find how much rent you could get for the given and divide it by its total square footage. This will give you the final answer, which is indicative of how low or high your property value can reasonably be.
• Age and condition. Older homes tend to have poor insulation and heating systems, so it’s probably not worth buying if this could mean higher heating costs for the tenant. You may want to consult a building inspector before making an offer as they’ll let you know what needs repairing and whether it’s better to buy or rent instead!
• Security deposit/fees. Ensure there are no additional costs – such as agent fees, “key money,” decoration expenses, etc. Otherwise, you could find yourself with a loss on your hands very soon after purchase.
• Amenities. The best type of homes for buy-rent investments has a range of useful amenities, such as parking spaces and elevators. This will mean tenants will have fewer complaints about the home and may even be willing to pay more in rent.

Remember, you mustn’t overextend yourself when looking for investment properties, as it can be very easy to do so – especially if other factors make a property look like a good buy. Before making an offer on any property, make sure you’re aware of all the hidden costs and benefits to ensure you’ll be able to cover your day-to-day expenses before anything else!