Happy New Year from Divine Properties!
With the new year upon us, we thought now would be a great time to share with you a great opportunity for you in 2017…Buying Income Property!! Below are key points to consider as well as the pitfalls to watch out for in taking the steps to purchase investment properties.
When buying income property there are several key points to consider. Much of that has to do with the health of the rental market you are exploring. Working with a property management company that specializes in renting and maintaining rental property, and the sale and purchase of income properties, will help you avoid the pitfalls experienced by many landlords.
There are several key factors to consider:
- What type of rental properties are in the highest demand in the area you are considering?
Knowing the neighborhoods, floor plans and bedroom/bathroom combinations that are most desirable will make obtaining and retaining tenants far easier.
- Will the property rent positive?
In the current market with interest rates still low and qualifying for a home loan more difficult for entry level buyers finding a rental property that will rent for more than your monthly payment should be doable.
- Will the property be easy to maintain?
Age and quality of appliances, flooring, roofing, interior and exterior paint, and landscaping make a big difference in the day to day maintenance cost of the property.
- Understand the ratios.
Certain combinations of demand, purchase price, and annual maintenance costs produce the greatest return on investment.
There are several common errors to avoid:
- Remember that you are buying this property to rent to others.
You will not be living in the property, others will. It is more important to love your tenant than it is to love the rental property.
- Remember that this is an investment.
Budget for the expense of upkeep and work that into your monthly cost of ownership setting some of the rent aside each month for repairs and replacement.
- Remember that you are providing a service.
Renting homes to others is a service to individuals, families and the community. Never forget that the renter is your client and deserves good customer service.
- Don’t go it alone.
Your investment in a professional property management company will save you time, exposure to liability, heart ache and money.
Divine Properties has been working with investors to help purchase, flip and rent out their properties to excellent tenants for years. It’s one of our favorite things to do. Being right around the corner from you in Amador County, don’t hesitate to reach out to us if purchasing an investment rental is in your plans for 2017!