So, you’ve been contemplating becoming a landlord? If you have done your homework on all of the demands that come with rental homeownership, and feel that this is a wise decision for you, then this fall is the time to be buying. With the weather rapidly deteriorating, so is the housing market. Sellers, at this time of the year, are often anxious to close on their homes prior to the onset of winter. This frequently enables a potential buyer to strike a deal with the seller. The opportunity to purchase your first rental home could very well be, right now. The chill in the air, coupled with low home prices and interest rates, makes this an ideal time of the year to become a real estate investor. The first, and most imperative step to take, is to team up with an experienced real estate agent.
Sadly, due to the economy, many people have lost their homes to foreclosure, or simply had to sell, because they could no longer afford their mortgage payments. Many suffered financial losses, leaving them with only one option, to rent. With the timing of fall, now is the time to contact your realtor, and begin your search for the perfect rental home opportunities. Perhaps your real estate investment could put a roof over the head of a family, in desperate need of renting.
As your realtor will advise you, in purchasing rental property, it is essential to know your options. By this I mean that not all rental investments are the same. There are single family dwellings, apartment complexes, multi-plexes and commercial investment options. You must initially devise a strategy, keeping in mind the amount of money you want to put in, how much work you want to take on, and if you are tackling the adventure alone. For the first-time real estate landlord/investor, residential housing or single family dwellings is highly recommended. On a smaller scale than multi-unit, or commercial real estate, single family investments allow potential landlords to “get their feet wet”.
Again, your real estate agent will play a colossal role in confirming the best course of action for you to take. Partnering with experience will provide you with the necessary guidance in locating the most promising properties.
In conjunction with your realtor, you will need to locate the ideal neighborhood or area, in which to focus. Location is key when your hopes are to rent the property. Highly populated areas where the rent is typically high is where you want to begin your search. Avoid rural areas where there is a much smaller pool of potential renters. The more bedrooms and baths, the better. Do some research on the crime rate in the area, as people do not want to rent in an unsafe neighborhood. And finally, the ultimate rental home should be close to schools, groceries, public transportation, hospitals, and malls. The more the property has to offer, the more interest potential renters will have. In addition, should you decide to sell later, you have already secured a property that will attract potential buyers.
Before embarking on investment property purchasing, consult a lender and secure capital. A financial planner, or lender, will assess whether you have enough assets to handle the fluctuation that hails from investing. There will be ups and downs for the duration of the rental process.
Once you feel confident that you have enough capital to sustain an investment property, it is advisable to consider consulting a property management service that can assist you in maintaining your investment. The last thing you want, is to have to be searching for a water heater, and somebody to install it, on a Sunday evening. A property management service would handle this for you. Be prepared ahead of time. Your real estate agent will oftentimes have a property management company that they have used before, and can recommend.
Lastly, establish connections with an attorney and accountant. The attorney will devise a leasing agreement, and handle any issues that may arise between landlord and tenant. And the accountant will educate you to the tax incentives and ramifications of investing. Having a support team will alter the business of rental home investing from becoming a headache, to becoming a profit-making enterprise.
At the end of the day, allow your realtor to provide you with a full understanding of the investment buying process. Your primary objective is to become part of a team, locating the most suitable property, in the most ideal location, with the best potential for profit. To be successful in this venture, pick up the phone and call your realtor today!
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