Once you decide which type of property you want to own, the next step is to find the right location. What do we mean by the right location?

Think of yourself as a potential tenant. Would you rent an apartment or condominium in that community? Is it close to major avenues of transportation such as buses, trains, or highways? Is the neighborhood desirable? Of course, what is undesirable for one person may be perfect for another. If you think the area would make it hard to attract tenants, then consider buying somewhere else.

Does the current owner have problems attracting and keeping tenants? Don't be afraid to ask pointed questions; this is your money at stake. You would thoroughly evaluate any other type of investment you are considering, so be persistent and if you don't like what you hear, walk away and look elsewhere.

IMPORTANT NOTE: It is risky to rely on the possibility of appreciation alone when purchasing a rental property. The income generated from renting the property is the more important consideration. If the value of the property rises, this is an added bonus.