Get Answers to these 3 Questions before buying a Rental Property

Property Management Blog

It is your long standing dream to have your own rental income property in Palm Coast. You know you can enjoy high income month after month through such a property. However, buying and operating a property is no child’s play and the first challenge starts with the choice of property itself. Here are 3 most important questions for you to ask when you are ready to buy a rental income property in Palm Coast.

Buying a rental property in Palm Coast involves lots of money. It is a long term real estate transaction which can extend up to 25-30 years if you are getting it financed by a bank. It is therefore necessary to ask yourself some questions before you are ready to take the plunge.

  • Are you buying it on your own or need finance?
  • If you need financing, how much money you need for down payment and renovations
  • For how long do you wish to retain the property?
  • Are you looking for appreciation in prices along with rental income?

Once you know answers to these questions, it becomes easier for you to select the right property. Now you are ready to get answers to the all important 3 questions.

What is the historical price of the property and how long it has been on the market?

The duration for which a property has been on the market indicates where you can negotiate with the owners on the price or not. If it has been listed recently, bargaining is difficult. On the other hand, there are two possibilities if it has remained unsold for a long time. Either the asking price is too steep or there is something wrong with the property.

As far as price history is concerned, you can learn about the price fluctuations of the property with the help of a local real estate agent. Increase or decrease in value over a period of time will help you in managing the property.

What are the pros and cons of the location?

Knowing the advantages and disadvantage of the area in which the property is situated is crucial for the kind of ROI you have in mind from this transaction.

  • What are the amenities available in the neighborhood? Is it safe for families? All families look for a property that is relatively safer for them.
  • What is the position of the area with regard to schools? What about the shopping and dining facilities? All families look for quick access to these amenities when deciding on a rented home.
  • What are the facilities for recreation? Does the property have a pool, tennis courts, gymnasium etc?
  • Is there any homeowner’s association? If yes, what are the charges per annul?

Once you get answers to these questions, you can calculate the rent that gives decent return on investment. You also know the target group from which you can attract tenants for your accommodation units.

Are there any issues with the property?

Very often, investment properties come to the market because of foreclosures and short sale. Also, if it has been on the market for long, it may be because the condition of the property is not good. You should get all the details about the property to know the additional costs involved with its purchase. You will need lots of money for repairs if there are any structural issues with the property. To get an honest and unbiased report about the condition of the property, you should hire services of a reliable inspection company.

Buying and managing a rental income property is a challenging task. It is quite profitable when you take the right decisions.

If you’d like to talk more about the value of inspections, or you need help with Everest Property Management, please contact us at Everest Realty.

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