Purchasing a House For a Rental Investment--Things To Consider

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6 years ago

So you are thinking of buying a house as a rental investment.  What should you know before taking the plunge?

  1. Buying the right property is the “secret.”  Your first step is to make sure the property is in an idyllic location for tenants and likely to appreciate.
  2. Next, you want to purchase the property at a good price and find financing that will allow you to make a profit (and positive cash flow) while renting out your property.
  3. Include any fix-up expenditures you might have to get the home in a state to rent it out. 
  4. Create a budget of your expected rental revenue and all costs associated with owning the home.  Homes take time, maintenance, and money. Be sure to allow for contingencies such as increase in tax and insurance, tenants leaving early, vacancies, and unexpected repairs and maintenance.    
  5. Decide whether or not you are interested in managing the property or if you'll hire a management company to do the heavy lifting.   If you do want to pay someone to manage the property, research who competent property management group. Don’t forget to include management fees into your budget estimates.
  6. Seek out the help of a solid real estate attorney to create a rock-solid lease document that protects you from problem tenants.  You can use the document for future leases and tenants.
 If you’re thinking of buying or selling a home and need competent and caring representation or advice, please call me at 801-244-4166