How to Buy Rental Property
Did you know that last year, home sales were the highest they have been in 14 years? Many of these properties were purchased with rental investment in mind. But do you know how to get the best from a rental property?
Many people see this as an easy money-making plan, but it takes a lot of time and effort to get right. Read on as we discuss how to buy a rental property.
See It as a Long Term Investment
Rentals are a long-term investment. You may get tenants who are extremely easy to work with and stay in the property for a long time, the ideal situation. However, it is more likely you will have multiple tenants in a property over a given time period that may not be as desirable.
You may have to do lots of maintenance, redecorate when they move out, or even pay for legal bills. By looking at long-term investment, even if you are breaking even month to month you will still make money by appreciation.
Consider a Timeshare
When it comes to buying an investment property, timeshares often get a bad reputation. This is because many people enter into them expecting to get the same returns as you would with a full property purchase, and don’t weigh up the pros and cons. Done right, a timeshare can be extremely valuable.
Most critics say that timeshares are hard to sell on. However, ones in sought-after resorts are actually in high demand. Disney and Hilton timeshare reservations are two companies that do ones that are extremely desirable.
Decide Who Will Be the Landlord
Not everyone is cut out to be a landlord. In fact, when you buy property for rental you may find that one or two properties can be a real hassle, especially if you are balancing them with other commitments. It often becomes easier when you have enough properties, so you can leave a job and do it full time.
The way around this is to consider leasing it to a management company. They will take around 10% of the rental income, but very often you make this back in the time you are saving. From screening tenants to providing maintenance, all you will have to do is collect your revenue.
Know the Market
Each market is different, even down to certain neighborhoods within states. You need to look for places that have positive long-term growth potential. Look at the growth in the last five years to see how it could benefit.
Keep Money Aside
Buying rental property is not a cost-free investment. At times, you may need major repairs, or you may find the property is empty for a period without tenants. For these occasions, it always helps to keep money in the bank for any unexpected occurrences.
How to Buy Rental Property
Now you know how to buy a rental property successfully, start to look for the ideal place. Always stick with your strategy, and go in it for the long term. You are sure to reap the benefits.
If you enjoyed our article, we have many more on our blog. From property to finance, we can help grow your wealth in the coming year.