Ready To Buy Your First Rental Property? How To Be Smart With Your Investment
If you see a lot of small houses for sale or foreclosed in your area and you want to make your first investment with a property, you'll want to find a real estate agent (like those at The SRQ Duo and other locations) about getting a rental. They can help you get the rental property that interests you, and to make the best financial decision with your purchase. Here are a few things to consider as you walk through each house.
Can You Add Quick Equity?
When you walk through the house, look at the condition of the appliances, the building materials, and the style or design. There are things you can do to the house to increase the value fast, without having to spend a lot of money. Small changes like paint and new hardware can make an impact, and replacing outdated appliances or materials like flooring at a low cost can also deliver big results. If you can add equity in the property quickly, the house will be a good investment.
Will the Rental Price Be More Than the Mortgage?
You want the property to pay for itself, so ask the real estate agent how much you should be able to get from a renter each month. If this amount is enough to cover the loan that you have, then you won't be losing money on the monthly payments. Making a profit, even it's small, will be the best in case you have to stick money into the house for repairs or updates.
Is the Property Marketable In the Future?
Just because the house may be good as a rental property, doesn't mean that it will be a great house to sell in the future. The realtor can help you find the key features that homebuyers look for and will pay more for, like more than one bathroom, a spacious yard, an eat-in kitchen, and a home in a good school district.
If you know you are ready to purchase your first rental property you want to go to your mortgage lender and get a preapproval letter to see how much you can spend on the property. The real estate agent can help you stay within your set budget to find a house that is going to be easy to rent, and that you can make money on over time. Real estate is a great investment and for your portfolio, you just have to buy the right properties.
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