Buying a property is an investment, especially when it is designed for renters. Having a rental property can be rewarding, with a growing income, tax-deductible interest on loans, and a more stable investment than the stock market. Before you decide to buy a rental property, check out these seven tips.
While you may be talented at tinkering, there’s a lot more that goes into a fixer-upper than a hammer and some nails. It’s tempting to buy a cheap house and flip it, but it’s risky and time-consuming. You never know what expensive fixes you’ll find and have to pay for. Many times, people put more money into a fixer-upper than they would have paid for a rent-ready home. Not only do you pay more in the end, but you’ll also have to wait for cash-flow to come from tenants as you have to fix the home before renters can move in.
Know Your Target Renter
When you set out to buy a rental property, have a target renter in mind. Do you live close to a military base or university? Do you want families or students living on your property? Knowing your audience helps you narrow down the market and find locations and amenities that your renters will appreciate being close to. Choosing a property that’s close to public transportation, other apartments, workplaces, or a gym can increase what tenants would be willing to pay for rent. Before you buy a property just because it’s affordable, look around the rest of the neighborhood… will your target renter want to live in the area and will there be things to do? Choose your property wisely.
Buying a rent-ready home means there’s less to fix. You might need to patch a few nail holes in the walls or clean the carpets, but the less there is to fix, the faster you can fill it and the less you’ll spend making the space livable.
Have a Lease-Design Ready
Preparing for renters right away can help fill properties faster because potential renters won’t have to wait for a lease to be drawn up. Leases will help you and your tenants have a clear idea of what is expected, including when the lease ends and when payments are expected. If you have a property manager, they’ll take care of this for you.
Know Your Marketing Strategy
Before you buy a property, take the time to research the best ways to market it. Look at what your competitors are doing to identify what strategies are working and what ones aren’t so that you can properly compete with others in your area. A popular marketing method is to advertise the property on online real-estate marketplaces. Most property management companies will do the marketing for your property, so if you’re choosing that route, this will be taken care of too.
Hire a Property Management Team
If you want the increased income and investment opportunity that comes from owning a rental property but you aren’t too keen on having tenants or fixing home problems, consider hiring a property management team. Find a property manager who will utilize technology, market vacancies, inspect and evict, and who will satisfy both you and your tenants.
Rooftop Real Estate Management has a top-notch property management team that would love to help you with your rental properties.
Check out the Neighborhood
The last step you should take before signing a loan contract and buying a rental property is to talk to the neighbors. Before you buy a house, you want to know exactly what your tenants can expect by living there. Meet the neighbors and drive by on different days and at different times to get an idea of how your tenants will be living if you choose to purchase this property.
Before buying the most affordable house on the market, do your research and hire a property management company that can help.