As investors grow tired of the ups and downs of the stock market, they begin to consider the concept of property investing as a better alternative. While not all people are cut out to be landlords, those who do may find that rental properties are great for building their long term wealth. But first, you need to know how to find good investment property.

Making the decision to purchase rental property is easy. What's going to be a bit complicated is finding a profitable rental property. This normally takes time, connections and lots of research.

Here are the things you need to know to get yourself established:

1. Set up your time horizon.

Before buying a property, you should have a concrete idea of how long you want to own it. If you're targeting a longer term investment, you will likely need to invest in repairs, improvements and maintenance.

However, if you're planning to own a property for a short time, you'll probably want to skip making key improvements. That is, if you are sure that you can earn back the costs you incurred at a higher sale price.

2. Expand your network.

Landlords who have had more experience are knowledgeable when it comes to finding properties. They usually: check out repossessions, run ads in newspapers, or work with estate agents. To gain contacts, many landlords suggest that investors join a local property owner's organization.

Another way is to get in touch with landlords directly to see if they are selling their properties. You can also call the numbers posted on rental ads in the newspapers. If you're willing, you can also comb neighborhoods with your eyes on the "for rent" signs.

3. Make sure your finances are robust.

If you have good credit, low credit card and consumer debt, it is more likely that you can get yourself a loan at a decent rate. When you buy rental property, a lender will require that you make bigger down payments and pay higher interest rates compared to a loan on your own home. This is because there is a higher percentage of investment property owners that default compared to homeowners.

A lot of landlords also suggest that there should be a sufficient amount of cash reserve at hand even after buying a property. This will be useful in times of vacancy and whenever there are unexpected repairs to be done. You should also make sure that you can save enough for your retirement needs and other life goals before you invest in rental property.

While not all property markets are the same, the key is to ensure that the rental income will include expenses, such as mortgage payments on the property, maintenance and repairs, vacancy rate, taxes and insurance. If you want to get a better estimate of your costs you should get a detailed inspection before you buy any property.

If you want more sources on various real estate issues you can take a look at real estate forums such as the property tycoons forum. These resources will offer you valuable information and insights you need to help you get solidly ensconced in the rental industry.

Copyright (c) 2008 Parmdeep Vadesha