Purchasing your first rental property can appear to be a challenging and pricey task. However, with a smart strategy, you can get your first Mesa rental property in no time at all. Whether you’re an accidental landlord or an intentional investor, the income revenue from a rental home can really have a positive effect in your life. To get going in the right direction, let’s look at the essential elements to determining and investing in your first property.
Search for as much information as you can about where you’re going to be investing. Search for key features that may draw-in quality renters– like for instance, parks, shopping malls, schools, or proximity to public transit. It is also a good idea to learn and understand mortgage rates and tax laws so that you can make a good estimate for how much you ought to budget for your future investment.
There are numerous opportunities for financing a new home that you plan to use as a rental property. However, remember that rental property loans can vary from those open to owner-occupied home mortgages. Here are some financing options you can try:
- Cash – One-time payment in full and the property is yours
- Mortgage – Requires a down payment and monthly payments thereafter
Note: there are numerous types of mortgages; do your research to ensure the loan suits your budget and needs
- Portfolio Lenders – Access an adapted portfolio of mortgages available with flexible terms specific to homeowners
- 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.
3. Finding a Property
Get together with a local real estate agent to discover if there are any properties available in your targeted location. Be positive you have the right approximation of the property’s requirements and how much you are prepared to spend. Don’t be hesitant to stipulate limits and sensible expectations when searching for property. When you determine the best purchasing point, you can then establish how much it will earn long-term.
4. Property Assessment
One of the things you need to do before handing over payment is to go through a property assessment. You need to know if your rental property can be ready for tenants immediately or if you still need to fix a few things. In this important step, you should be able to estimate the property’s performance— both the present and potential performance.
At Real Property Management East Valley, we can inspect the home before its acquisition so we can give an honest assessment concerning its rentability. Together with that assessment, we can give recommendations for upgrades that you may want to think about. If it’s warranted, we can also make recommend a professional home and pest inspector.