Are you attracted to the prospect of monthly rental income from tenants? Are you planning to buy a rental property that can generate passive rental income for you month after month? If yes, then here are some important things to keep in mind when searching for rental income property.
Do not buy a building that needs costly repairs
It is easy to feel attracted to properties in a poor condition available at much less than their market value. Keep in mind that it is not as easy as shown in realty TV shows to rehab a property and make it rent ready. Do not commit this mistake of buying a fixer upper unless you have full confidence in your abilities to turn its condition around in quick time. You may find yourself spending so much money on repairs that it does not remain a profitable venture for you.
Instead, you should be on the lookout for a property that is in a good condition even if it is much costlier than a fixer upper. You will not need costly repairs and save your time and effort by buying a property that requires only cosmetic improvements.
Keep in mind the location of the property
Location is crucial in rental income business. There is no use buying a good property at attractive price in a remote location as you will always struggle with high vacancy rates. You will not be able to attract large number of tenants if the property is located far away from mass transit system and other important amenities like schools, markets, and workplaces. If people see that they must cover a large distance just to pick up their groceries, they will stay away from your property.
The location of the property should be in an area that is close to markets, restaurants, entertainment features, and the mass transportation system. People are ready to pay a higher rent if the property is situated close to schools and other amenities.
Get damages inspected by professionals before taking a decision
If you have shortlisted a property, it is prudent to call in professionals to look at specific damages to get an idea of costs involved with repairs. If you see leakage problem in units, a seemingly minor problem may turn out into a very costly repair to make the project unfeasible. Check the condition of the roof and the gutters as repair of roof or its replacement can cost you thousands of dollars. Closely look at the foundation of the property to assess the risk of flooding. If possible, pay a visit to the property before rain and soon after rains have taken place. Also, check for the use of asbestos in the basement and the ceiling insulation. You may find it difficult to get rid of this substance from your property later.
Buy a property with cosmetic blemishes
You must stay away from rental properties requiring long and tiring repairs. But you can happily buy a property that requires minor repairs that can be carried out quickly with minimal spending. If you see window glasses broken or wallpapers torn apart, there is no need to worry about eh condition of the property. Peeling off or cracked paint should not be a reason not to buy a good property. These small issues can be easily fixed with small amount of money. In fact, your eyes should be on the bigger picture rather than these minor blemishes.
There are many things to keep in mind when buying a rental income property. If you are mindful about location and condition, your task becomes easy.
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