Are you looking to diversify your investments a bit? Wanting to take advantage of the current lower home prices and interest rates? Take advantage of the tax benefits associated with owning a rental? We have some tips for you here:

The art is in the buying-mistakes made here can pain you for years to come. Take your time, be cautious and well informed and Do Your Research!

First-figure out where you want to buy and how much you can spend while still making a decent profit. Find out what rental rates in the area are-try to get a feeling for demand. Find out what taxes and utilities are going to look like, and of course how much the mortgage is going to be each month. With that you can figure out your "spread"-the amount of money you can spend and make a decent return on your investment.

Then it's time to start looking, which starts with finding the right neighborhood. Unless you're wealthy already, you probably don't want to be looking in the ritzy neighborhoods or the beach. You probably want to be looking in the solid, middle class neighborhoods with lower crime rates and/or a strong community spirit.

Regardless of what neighborhood you choose, you never want your property to be the worst-looking one on the street, or complaints and possibly citations may follow. If you choose a property which visibly needs maintenance, you should budget to correct these issues within the first year, and ideally prior to renting it at all. This helps to show the township or city officials that youre one of the good landlords, committed to keeping your property up, and can make a huge difference in your experiences over the life of the property.

Each property you own serves as a reference to your work, abilities, and commitment.

Second-Be aware of local rental regulations! City enforced renovations can be a huge budget eater! Make sure you have a survey and any necessary upgrades planned for. Make sure any previous work by others was permitted. Missing a step here can cost you, if someone did unpermitted upgrade work on the property.

It is a safe assumption that youll need to bring your property into accordance with local rental regulations prior to your earning any income from the property. Knowing the issues, you can budget accordingly.

Third-Make sure there is proper parking. Quality tenants are not going to want to leave their cars on the street, normally. Also, in some areas there are code statutes on the number of parking places vs the number of bedrooms.

Fourth-You want to keep it simple! Look for standard construction. A Victorian with a slate roof is a lovely thing, but you won't be able to go to the local home improvement store for much in the way of parts. Simple, easy to access construction with fairly standard materials is you best bet for keeping maintenance prices down.

When examining a potential investment property, consider ease of access to the heating, cooling, plumbing, and electrical systems. A panel or wall behind the shower allows quick access to plumbing in case of a problem, whereas if that shower backs up to another bathroom, you might be looking at removing a whole tiled wall.

As well, simple, easy to maintain landscaping is a good thing. Most tenants are not gardeners. Easy for them and for you is a good thing.

Fifth-Look out for safety issues and fix them! A licensed home inspector can help to identify potential safety and maintenance issues and even provide ballpark estimates for correcting these.
As a rental property owner, you have an increased risk of lawsuits overall, so safety is a primary concern, but accidents still happen. Owners often choose to limit their personal liability risk by establishing each property as its own LLC. It is advisable to consult a lawyer to ensure that your other assets will be protected in the event of a lawsuit.

Here's a partial list of things to look out for:
Radon
Lead paint
Asbestos
Mold
Exterior stairways without handrails or where ice/snow/rain may cause a slip hazard
Steep steps
CO and smoke detectors (fire hazard)
Obstructed doorways or exits (fire hazard)
Broken windows/glass
Cracks or unevenness in sidewalks, driveways, or walkways (trip hazard)
Open electrical circuits, outlets or wires (electrocution hazard)
Unfenced swimming pools (drowning hazard)
Lack of GFI outlets near kitchen/bathroom water facilities (electrocution hazard)

Sixth-bigger isn't always better, if you're renting. As long as your rental meets local code for bedroom size and such, you're set. More just means you pay more in taxes and tenants pay more in rent. Four small-to medium-sized bedrooms may actually produce better income than 3 large bedrooms.

Seventh-Utilities can eat your profit if not set up correctly. In multiple unit buildings, you'll want to be sure that split utilities are already set us, as it is expensive to have it done yourself.

Want to keep the bills in your name but have the tenants pay their portion to you? The law does not generally allow you to collect if they default on these sums, so you may risk losing out if the tenant stops paying their portion of the utility. Plus, you are still required to furnish them with these utilities, even if they fail to pay. Unless you can incorporate a flat fee into the monthly rent figure which covers your expenses even as costs continue to rise, it is best to insist that tenants pay utilities directly, under their own names. Then, in the event of default, you are not responsible.

There's our renters tips-Good Luck and Happy renting!!