Buying rental property can be a significant and potentially rewarding investment for the first-time landlord. However, this investment may also have its downfalls. In fact, all professional property buyers will tell you that you’ll need to take some precautions by:
- Doing your research;
- Taking your time with such an investment; AND
- Learning from already-established property buyers.
Here are 10 tips for buying your first rental property like a pro:
Obtain the right mortgage
“First, understand the mortgage market,” says Joshua Ware, a content marketer at 1 Day 2 write and Write my x. “Once you get the right mortgage, that can assist in helping to lower costs and reduce any uncertainty about the property’s cash flow.. However, keep in mind that a mortgage should be leveraged wisely, or else it’ll cost you. So, when in doubt, don’t hesitate to consult with a professional.”
Only Buy What You’re Already Familiar With
When it comes to investing in a rental property, the last thing you want to do is to throw money into an area and niche that you’re unfamiliar with. Therefore, draw from your previous life experiences and do your homework.. For example, if you’ve graduated from a certain university, you could consider buying a student rental near your university’s campus.
Thoroughly Screen Potential Tenants
It’s important to do a thorough screening of all tenants that take an interest in your rental property. Consider using tools like MyRental, which offers a free online application for tenants, as well as a monthly subscription for landlords to verify the following:
- Previous addresses;
- Criminal backgrounds; AND
- Eviction history.
Accept Online Rent Payments
To ensure tenants pay their rent on time, give them the option to pay online.. Nowadays, a lot can go wrong if renters try to mail in their rental payments; whereas online payments generally arrive to the landlord at a faster rate.
Consider Buying A Vacation Rental Property
Believe it or not, people want to have a place to stay while on vacation; so, they might rent a vacation home. Why not consider tapping into the vacationing market? You should consider evaluating a potential vacation rental property, look at comparable rental rates on sites like HomeAway and VRBO, and consider how many weeks a year you may be able to rent the property for
Conduct A Nationwide Search For Property
Why stick with considering one location, when you can look to other parts of the country? In fact, many expert property buyers will buy properties in other parts of the country to maximize profit and build a reputation in property renting. You might find a property that’s much more affordable and provides a much better return on investment in an area that you had not previously considered.
Know Rent Regulations
When renting properties to tenants, be sure that you are aware of relevant specific rent guidelines in the area where you’re purchasing. Such guidelines explain the relevant laws in place governing your obligations. This ultimately helps you determine your investment.
Learn From Other Landlords
“Many landlords will have plenty of experience buying and renting out properties,” says Joe Spencer, a business writer at Brit student and Coursework writer. “So, finding and keeping good tenants is an experience all its own. If you know a landlord personally, talk to them about their experiences. Or, join a local landlord association and get advice on the things that you can do, and what mistakes to avoid.”
Inspect Property Regularly
It’s important to have your rental property inspected regularly to ensure that it’s rentable to tenants. Check for any problems – gas leaks, crumbling foundation, etc. If you see any problems you should have them fixed.
Buy Rent-Ready Properties
Finally, buy properties that are considered rent-ready. It is likely preferable to not risk buying a property requiring a total rehab, unless you have experience renovating houses. Remember: the purpose of buying a property is to rent it out and produce income.
By keeping these 10 pro tips in mind, you’ll be able to maximize your likelihood of buying your first rental property, and avoiding costly mistakes. Always remember: research the neighborhood that you’re going to buy in, and know what similar properties have sold for before making an offer. By learning and prepping ahead of time, you’ll give yourself the best chance of making a wise investment.
Michael Dehoyos is a writer and editor at Thesis writing service and Write my case study. He is also a contributing writer for online publications, such as Origin Writings. As a content marketer, he helps companies improve their marketing strategies and concepts.
This is general information only and contains only the views of the author(s). It is not financial advice or recommendations, and does not take into account your personal needs, objectives and financial circumstances. Please carefully consider whether this information is appropriate for you.