Jan. 10, 2014
With the recovery of the housing marketing, now is the time to get your foot in the door. It is not often that listing prices and interest rates are both low. It is especially ideal if you are intending to purchase an investment/rental property. This allows you to get a higher return and profit more since less will go to paying the mortgage. Follow our tips when looking to purchase an investment property.
Choose the Right Rental Property
There are a variety of listings that can be rented out, but it is important to choose the one that meets your needs. You will want to consider options such as condos, duplexes, and single-family homes. The condo is generally more expensive, but you will not need to worry about completing any maintenance. Duplexes allow you to have control over the property and give you two rentals. This can be more profitable, but that also means more money going in for maintenance or issues that may arise. A single-family home is usually rented long term, though it can often be altered to create a few apartments. It has the advantages of the duplex, but only one family to take care of.
Knowing Your Investment Locations
The location affects the type of tenant you will have as well as your rental price. Purchasing in a more expensive area means you can list the rent for more, however, you may find there are less people willing to rent. If you want to ensure your property is always filled, search for homes near colleges. Students are always looking to rent and there are always new ones moving in. They can, however, be high risk due to damages that may be done from parties and less cleaning/care. No matter where you decide to buy, it needs to be a location that has potential renters. This means it should be a densely populated or highly desirable neighborhood.
Inspect Your Rental Property
Ensure that your property is thoroughly inspected prior to purchasing. Even if does not affect the sale you want to know every problem the home has. The conditions need to meet codes and be deemed livable in order to rent it out. Where you may feel comfortable living, a tenant may not. You do not want to end up finding you have a serious electrical or water damage after renting your investment property out. This is expensive not only because you need to fix the issue, but you need to pay to put your tenant up as well. He may even be able to sue for property or health damage dependent on the circumstances.
There are always homes listed on the market that can be ideal for investment properties. You may want to consider short sales or foreclosures to get a better deal depending on your capabilities. It is important to note that buying an investment property is much different from buying your dream home. Use a real estate agent like Laurie Stoessel who is experienced and knowledgeable in both rental properties and the city. She can be contacted today at (303)378-2320.