So, you’ve decided you want to try your hand at landlordship. We don’t blame you; even though there’s a lot of work upfront, the long-term return can be quite lucrative. We’ve put together this list of things to prepare and research before you purchase your first income property.
- Your Finances – Make sure your own finances are in order. It’s wise to have a little cushion in the bank because the fact of the matter is, it might be a few months before you start profiting.
- Property Selection – It’s not just about the neighborhood. Renters especially families will also consider the local schools, job market, crime rates and even amenities. This is especially true if you want to attract good, long-term renters, they’ll be looking to live and work in a safe area where they can easily access conveniences such as shopping and nightlife.
- Competition – Be sure to look into what future developments might be happening in the areas you’re looking to purchase your rental property. New construction could mean new competition.
- Vacancy Rates – These rates can affect your ability to generate income. High vacancy rates often force landlords to lower their monthly rent in order to attract tenants. Meanwhile, low rates often mean a landlord can increase the rental price.
- Additional Costs – Remember, you going to need to factor in the cost of insurance, taxes, legal fees, months where a unit or units are vacant, maintenance and a property management company among other things.
So before you begin, do your research, carefully manage your finances and plan ahead as best you can for both the expected and the unexpected expenses. If you’re ready to get started, click here to apply for financial assistance on your buy to rent property.