Purchasing a rental property can be a stressful and overwhelming task. However, with the right approach, you can own your first Palm Harbor rental property in a short time. Having a rental income to augment your income can be an advantage in helping you accomplish your life goals. Below are the crucial elements for tracking down and buying your first rental property.
Research
Collect as much information you can about the area you determine to invest in. Look for key features of the area that might attract residents, such as a park, shopping, proximity to public transit, or a nice view. You should also learn about the tax laws and mortgage rates to give you a safe estimate as to how much you need to allow for your future investment as well as how much money will be required as down payment and mortgage costs for your first Palm Harbor rental property.
Finance
There are many ways to finance a rental property. Rental property loans or finance options might be different from those convenient to owner-occupied home mortgages. Here are some different types of financing options you might consider:
- Cash–Use cash to buy a rental home.
- Mortgage–Pay a down payment and then monthly mortgage payments.
Note: there are many types of mortgages, do your homework to ensure the loan fits your budget and needs - Portfolio lenders–Access an adapted portfolio of mortgages available with flexible terms specific to property owners.
- Federal Housing Administration (FHA) loans–While FHA loans are designed for those who are planning to live on the property, there are some options available with FHA that allow FHA-financed homes to have more than 1 unit (up to 4). Using FHA, you could live on the property and have a rental property unit.
- 203K loans–This loan factors in the cost of home repairs and improvements into the loan amount. This can be useful when looking to renovate a property and rent it out.
Find a Property
Connect with a local real estate agent to examine where there are properties available in your planned area. Have a general idea of the specifications of the home and how much you are willing to spend. Make sure to have limits and expectations when finding a property. If you find the right purchasing point, you can determine your long-term profitability.
Property Assessment
A key step is to have a property assessment of the location to check whether it is habitable and what will need to be fixed or replaced to make the home rent ready. Before purchasing, you can ask Real Property Management TradeWinds to assess the rental home, give counsel regarding its rentability, and make propositions for upgrades, etc. They can also prescribe a certified home and pest inspector if necessary. Within this crucial step, you will be able to find an estimate as to the property’s possible performance.
Would you like a free assessment of your rental property-to-be? Please contact Real Property Management TradeWinds today by filling out the form online or calling us directly at 727-400-4722.