So you’re looking to get a rental property?? That is beyond exciting and a huge move in one’s life that can ultimately garner great profits. Here are some things to consider prior to purchasing a rental property.
- Legal Knowledge — Maybe you’re familiar with construction projects and are good with finances, but it’s equally, if not more, important to be familiar with laws surrounding owning property! Knowing what rights you have as a property owner vs. what rights your tenants have can save you stress in the event that issues with tenants come up. We hope you never enter a sticky scenario in which you need to use your knowledge of the law, but it is necessary to learn before making the jump of purchasing.
- Pay Debt — While rental properties can earn money, they also often cost money in terms of repairs, vacancies, upkeep, etcetera! If you have student loans, medical debt, or any other money you’re waiting to pay back, it is worth thinking about whether or not purchasing a rental property is the right choice at this time.
- Location, Location, Location — Maybe you’re considering getting an investment property somewhere you do not currently reside that is out of reach. In these cases hiring a reliable property management company (….we might know a company! 😉) is ideal in order to handle any issues that may arise. In addition to hiring property management, understanding the area you are looking in and what the culture, people, attitudes, and prices are will serve you in the long run. Doing your research on the surrounding location is key.
- Be Ready to Pay a Larger Down Payment! — Investment properties often have more strict approval requirements, thus, it’s important to be prepared with downpayment money, especially considering mortgage insurance isn’t available on investment properties.
- Emergency Savings — Emergencies happen, it’s just an unfortunate part of life. When emergencies do happen, it is vital that you have the funds readily available to help the tenants that will be living in the property. You should plan to save a good amount of money specifically for this purpose.
- To Fix or Not to Fix? — Fixer-uppers are enticing, especially when you have a vision! If this is your first rental property, this is something you might want to think about deeply before jumping the gun. Fixer-uppers can have longer timelines than expected as well as larger bills than you might expect. Be cautious and make sure this is the right choice for you before purchasing.
All in all, there are many things to consider prior to purchasing a rental property as well as what benefits the property can serve you. Whatever choice you make, one thing that is certain is that CREC Property Management is there to help you every step of the way with your rental property. If you’re interested in learning more about the services we provide give us a call at (843) 574-9100 or shoot us an email at [email protected]!