7 Things to Avoid When Buying a Rental Property

Whether it's a home for you and your family or a rental property, buying a house is an exciting time. It can be easy to want to rush into a purchase based solely on appearances, emotion, and perceived value.

But if you're purchasing a rental property, here are seven things you'll want to avoid to ensure that it will be a place tenants will want to call home and that it will be a good investment for you, too.

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A fabulous house with a lower asking price than you would expect can be very tempting. But if that lower asking price is because the surrounding neighborhood appears to be in decline, you may want to pass. Tenants won't want to live next door to abandoned properties, overgrown lawns, or poorly maintained homes.

That type of neighborhood will also continue to bring down your property value quickly over time unless things change. Part of what you're paying for when you buy a property is its surroundings, and it's usually worth it to buy in a neighborhood that's up to par with the home you're purchasing.

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You'll probably want to try to get a rental property fairly close to places where you can shop, dine, and work. That said, you may want to avoid any home that's too deep in the heart of the action. Many people wouldn't want to live right next to a big-box retailer or major shopping center. Constant traffic and noise right by their home may not compensate for the convenience.

And while living right next to a school could be super convenient for a tenant whose child is a student there, no other demographic is likely to want a front-row seat for all the commotion of school start and end times most weekdays.

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Prospective tenants will almost certainly arrive to view your property with certain expectations. Many of these have to do with what they've come to expect from properties within that area and price range.

If you're searching for property in a rural area, tenants are likely to expect a sizeable yard and some space between them and their new neighbors. In that case, a home with a small yard could be a huge disappointment. Likewise, if you purchase a property with no garage when almost all the homes in the area have one, many potential tenants could see that as a problem.

Once you've found a property you think will work for you, it can be easy to get caught up in envisioning everything you'd like to do to it. Of course, you want to make it a nice place to live. If it needs remodeling, by all means, remodel away!

But unless you're dealing with a luxury property, don't put in things like top-of-the-line flooring, fixtures, and countertops and expect to make it up in rent. Trying to stay more midrange is usually a safe way to ensure tenants will be happy with the property without hurting your bottom line.

And speaking of remodeling, you'll definitely want to get estimates for any renovations or repairs you would want or need to make before making an offer.

This is common sense when the property will clearly need a major overhaul. But even seemingly minor issues can wind up being much more costly than you might expect. A relatively clean inspection isn't enough. Make sure you get those estimates in your hands, too, before moving forward.

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This is a dark topic but one you'll need to consider when buying a rental property. Many potential tenants will conduct an online sex offender search before plunking down a security deposit, and you won't want any surprises popping up at that point.

Of course, you can't control who might move there in the future. But if you run the address of a property you're considering and find that a sex offender lives very close by, it's probably a good idea to keep looking. It only takes a minute to plug the address into the Dru Sjodin National Sex Offender Public Website to see what pops up.

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Before buying a rental property, you'll want to know what is and isn't legally allowed. That applies to the property itself as well as the immediate surrounding area. A growing number of communities have had problems with unruly guests and now forbid vacation rental properties as a result.

If you're looking to become a vacation rental host -- or would at least like to have that option for the future -- you'll want to confirm that isn't the case where your potential property is located.

You'll also want to see how the surrounding property is zoned. If a large lot across from the property is zoned commercial, you may want to pass to avoid a scenario where a big, noisy business could make your property less desirable.

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Deciding what would or wouldn’t make a great rental property can be difficult. A couple of these items are landlord-specific issues, but most of the problems on this list can be dodged by thinking about how you would feel about living at each property you look at.

Anything that leaps out at you as a turnoff is likely to be a turnoff for potential tenants, too -- and potentially painful for your bottom line.

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