There are few absolute deal breakers for rental properties. Each property has value. Sometimes, that is a negative value, however. There are some major red flags regarding rental properties. These do not include such elements as an HVAC that is shot; this simply impacts the price to offer. These problems are property aspects that are relatively incapable of being altered. Look out for these red flags in rental properties.
Properties in areas that are high in crime generally cost more in maintenance fees than the amount of rent they bring in. Tenants in such areas are also more likely to damage a unit significantly or to get behind on rent. Really rough areas, for beginners to the market, should be seen as a red flag.
Terrible schools often are a part and parcel of areas that are rough, but not always. Some densely urban areas have quality areas while still having bad schools. In those, most people living there send children to private schools. People look first at safety, then at school districts, when it comes to family-sized properties. Keep this in mind as a potential red flag.
One- or Two-Bedroom Houses
Families are typically seeking homes with more than two bedrooms. When purchasing a rental property that has only one or two such rooms, the odds are that clients will be more transient. Some such houses can have a bedroom added on, but others simply lack the space. Small houses are often a risky business, thus making the lack of bedrooms a red flag.
Tiny Kitchen or Bedrooms
In some houses, a tiny kitchen can be fixed by removing a wall. Often, however, there is simply no good economical way to accomplish this task. Potential tenants look at kitchens, wanting plenty of space and updated features. Tiny bedrooms are also problematic for potential renters.
Lack of Storage
Even a house with three bedrooms and two bathrooms can be a difficult property to rent if it has no basement, garage, or bonus rooms. This lack of storage tends to be a huge negative for potential renters. Adding a shed to the backyard is a possible fix, but it is no real solution when tenants desire space.