Owning a rental property can be a daunting and overwhelming task. Still, with a studied approach, you can own your first Central City rental property in a short time. Having a rental income to grow your income can be a bonus in helping you to reach your life goals. Below are the chief elements to establishing and buying your first rental property.
Garner as much information as you can about the area. Look for key features of the area that might attract residents, such as a park, shopping, proximity to public transit or a nice view. You should also comprehend about the tax laws and mortgage rates to give you a dependable estimate as to how much you need to budget for your future investment as well as monies asked for as down payment and mortgage costs for your first Central City rental property.
There are many different types of choices you can bring into play when looking to finance, rental property loans or finance options might be different from those available to owner-occupied home mortgages. Here are some different types of financing options you might consider:
- Cash – use cash to buy a rental home
- Mortgage – pay a down payment and then monthly mortgage payments
Note: there are many types of mortgages, do your homework to ensure the loan fits your budget and needs
- Portfolio lenders – access an adapted portfolio of mortgages available with flexible terms specific to property owners
- 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.
Find a Property
Touch base with a local real estate agent to get a glimpse of where there are properties available in your targeted area. Have a general idea of the specifications of the home and how much you are willing to spend. Make sure to have limits and expectations when finding a property. If you find the right purchasing point, you can determine your long-term profitability.
A key step, not to be dismissed in the process is to have a property assessment of the location to discover if it is habitable and what will need to be refurbished or replaced to make the home rent ready. Prior to purchasing, you can ask the Real Property Management Baton Rouge office to assess the rental home to give direction with reference to its rentability and to make suggestions for upgrades etc. They can also suggest a certified home and pest inspector if necessary. Within this necessary step, you will be able to find an estimate as to the property’s current performance and eventual performance.