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Buying a wrong home can cost you lot. You should be aware how to avoid the most common mistakes while buying a home. Here you can see the top most important tips for those who are buying their first rental property.
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Buying a rental property can be beneficial decision to enjoy the return on investment in future. If you taking these decision wisely, you can enjoy earning coming from the rental property and also consider these earing as a supplement to your retirement. But sometimes your one mistake can cost you lot when buying a home. Investment in rental property can be risky if we are not aware of the things which we needed to being a landlord. Here is the most important tips given for those who are buying their first rental property. 1) Are You Comfortable as a Landlord? Before taking decision to buy rental property make it clear that you are comfortable as a landlord. Because landlord have lots of responsibilities like understanding basic renter law, solving the tenant issues. Managing home maintenance like home repairing, sewage leakage, water issue, and other issues. The landlord have to bear all this repairing and maintenance cost and it can eat your profit.
2) Clear your Personal Debt Before buying a rental property First clear your personal debt before buying a rental property. This is also depends on the situation. If your interest on your debts is higher than earning from rental investment then it is advisable to clear all debts like unpaid study loans, bank loans, or other debts. On the other side, if you’re earning from your rental property is higher than your debt interest. Then no need to clear your debt. 3) Select property which fits your goals Before starting your search for rental property make your goals clear. Some real estate propertyyou will give you better for cash flow, but other you will find which might be cost you a little more. Calculate your budget and monthly maintenance cost and repairing cost then according to that search the property which fit in your goal.
4) Work with a Property Management Company If you want more tenants for your rental property, take a help from a property manager. Property managers closely deal with renters, and they maintain data of renters according to their location preferences, paying capacity, and according to their expectation. They advise you for rent also that how much you can expect from your properties according to the market scenario. 5) Try to Buy a Low-Cost Home It is advisable that when you are searching for a rental property than purchases a home at a low cost. Because when you are buying an expensive home than maintenance cost and repairing charges will also be high. And it is landlord’s responsibility to bear all maintenance and repair expenses. So roughly calculate maintenance and repairing cost according to the home.
6) Choose a Location near Amenities • This another important aspect while hunting for rental property. Give priority to the location and amenities available because this will attract more and more tenants for your rental home. Always select the location which is close to public transit and amenities should be available near. • Find the location with a low crime rate, and safe environment. Availability of amenities, such as store, parks, restaurants and malls nearby in the location. • 7) Calculate Operating Expenses • Another major aspect to look in which searching for rental home is to calculating operating expenses. Because landlord has to bear all maintenance and repairing charges. • Operating expenses of a new home can be between 35% and 80% of your gross operating income. For more easy understanding, here you can implement the 50% rule. If the rent you charge for your home is $2,000 per month, expect to have to pay $1,000 in total expenses.
8) Talk to the Neighbours • During your property search, talking with the neighbours can be the great source to know more about the locality and neighbourhood. • If you buy your rental home near universities then that will be ideal locations because many students rent a home for a long time until their study. You will have chances to earn more return on your investment. • 9) Get Advice from Other Landlords • Keeping a good tenants is an art. Taking the advice from other landlords, it can be an easiest ways to understand the roles and responsibilities of a landlord and how to handle their queries. • They will share their personal experience as a landlord and what to do and what things to avoid. This advice will help you avoid the mistake and it will also reduce the chances to lose your renters.
10) Put yourself in the renter’s shoes If you want to attract more renters to your home then think like a renters. Putting yourself in the renter’s shoes, is the best way to understand about renter’s requirements.Imagine yourself as a renter and now think what facility needs to add to home. This all are the important aspect to consider before buying your first rental property. Set the goal before making purchase. Calculate your maintenance and repairing cost, also understand the depreciation. To become a good landlord take Advice from Other Landlords and learn from their personal experience. Hope this advice can be helpful while you are buying your first rental property.
Thank You You can also check out are related article How to avoid the most common mistakes while buying a home? Top 10 Home Renovation Tips in Your Budget Buying a Home After Retirement? : 3 Things to Consider Read More
