Recommendations To Help You Search For The Right Single-Family Home To Use As A Rental Property
by Luke Fields
Buying a single-family home in your area is a great method to start out in the rental property business and build equity and earn cash flow on your investment. But before you choose the first single-family home that you would like as your own, be sure that you consider what types of features and benefits make a good rental property. Here are some recommendations to help you find the right rental property to buy as an investment.
Consider Rental Options
If you are buying a home that you are going to rent out, look at what type of rental service you want to provide to the community. For example, do you want a long-term rental that you offer as a year-long lease, or do you want a short-term vacation rental that you rent out by the day, week, or weekend? A vacation rental can help you potentially gain more cash flow, as you can charge a bit more for a vacation rental house that is furnished with all the amenities a vacationer will want. However, for a vacation rental, your rental home should be in a tourist area or near a destination where vacationers will want to book their housing accommodations.
If you are looking for a long-term rental house, look for the type of single-family home that is attractive to the renters in your area. If you are looking at a rental property that is in a middle-income area or near a college or university, you can market the property to each type of renter. For a college or university area, you could rent out your single-family home by the room to students, which can boost your rental potential. But if you are planning to gear your rental to families, you may want to look for a home that has a fenced-in yard, at least three bedrooms and two bathrooms and washer and dryer connections in the property, as examples. It is important to know the market in the area you are buying a property in so you can best rent it out for success.
Calculate Your Cash Flow
Just as you look at the features and location of a home when choosing a rental property, you should also focus on the potential cash flow of your investment. You don't want to buy a rental house and have to put money back into the property each month from your own personal income. This type of liability and risk is not going to benefit your position at all as a landlord and property manager. In fact, you will be financially at risk of losing your rental property, especially if you have unexpected rental costs or if damage come up with your property that you cannot cover.
Evaluate the cash flow of a rental home with an analysis of how much you can realistically rent the home for and how much the property's debt payments are going to be. Be sure that you calculate property taxes, property insurance, utilities, and maintenance on the property. Contact a real estate agency like Sold with TJ to learn more.
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About Me
Welcome to my website. My name is Larry Silva, and I want to talk a bit about private mortgage insurance. You may have heard the term PMI mentioned when you were in the process of purchasing real estate. When I first heard my lender talking about PMI, I was very confused. It was my realtor who sat me down and explained what private mortgage insurance was and when someone is required to purchase it. He told me that PMI is not lifelong insurance; it can be cancelled when the mortgage principal balance reaches a certain point. Once it was explained to me, private mortgage insurance was no longer a mystery or a confusing concept. I would like to pass on what I learned and hope that you find it to be of value.