As someone looking to invest, it’s a good idea for you to learn more about buying your first rental property. Owning an investment property can be a great way to add to your portfolio and income, but it does have its risks.
When you purchase an investment property, you’ll likely need to put around 20% down as the initial payment. Then, you will need to assess if you’re ready to become a landlord. Not everyone is suited to this job, because it can be demanding work.
When you’re a landlord, you may have various things you need to do around the home or apartments that you own. If your tenants call you about leaks or damage, are you able to handle those issues on your own? If not, do you have a maintenance crew or people you can call to help? As you add more properties to your portfolio, you may want to consider having a property manager, so you can relax while they handle issues with tenants, like late rent payments or maintenance requests.
What is the top tip for buying a rental home?
One of the most excellent tips to listen to is to find a property that is in an area where there is high demand. For example, you may want to buy a rental property with multiple units near a college or university. You may want to find a property that is in a busy corridor where people go to work.
Your goal should be to find a property that is in an up-and-coming area, rather than settling for a low-cost option in a declining neighborhood. Look at the area around the property you’re interested in purchasing and decide if it will continue to grow or if the area seems to be getting worse due to neglect or little income. If you can buy a property in an area where real estate is in demand but there is little room to build, then you’ll be in an even better position to fill your apartments with tenants who stick around longer.
Once you find a property that you’re sure you want to invest in, you can make an offer and work with your attorney on negotiating a contract that protects your interests as you move forward with the purchase. Your attorney will help you protect yourself by working out a contract that is fair and protects the purchase.