Owning a new rental property can be a scary and potentially costly task. Nevertheless, with an intended approach, you can own your first Cary rental property in a short time. Having a rental income to increase your income can be an advantage in helping you to accomplish your life goals. Below are the central elements to discovering and buying your first rental property.
Collect as much data you can about the area you plan 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 understand about the tax laws and mortgage rates to give you a substantial estimate as to how much you need to allocate for your future investment as well as monies required as down payment and mortgage costs for your first Cary rental property.
Finance
There are many diverse types of choices you can use when looking to finance, rental property loans or finance options might be different from those accessible 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 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
Associate with a local real estate agent to inspect where there are properties available in your marked 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, not to be neglected in the process is to have a property assessment of the location to ascertain if it is habitable and what will need to be fixed or replaced to make the home rent ready. Before purchasing, you can ask a Real Property Management office to assess the rental home to give counsel about its rentability and to make bits of advice about upgrades, repairs, etc. They can also suggest 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 present performance and possible performance.
Would you like a free assessment of your probable rental property? Please contact Real Property Management Excellence today by filling out the form online or calling us directly at 919-827-1107.