Buying property to rent

It is perhaps the most opportune time to buy a second home. Property prices are depressed, mortgage rates are lower, and, above all, there is a wide choice available to investors because of lack of demand for new properties. Look out for good real estate bargains, which are widely available.

When choosing to buy a property to rent, follow these guidelines:

Check the data available with property and real estate management firms to evaluate whether the occupancy levels for rental properties are on the rise. If the data suggests it is an opportune time, jump before it’s too late and become a landlord.

As soon as you have made a decision to look out for a suitable property to invest in as a rental property, apply for a pre-qualification to determine how much the lending institute will loan you.

Calculate the total equity that you can contribute to arrive at the budget you are comfortable with.

Once your budget is finalized, seek the help of a realtor to provide you with the best possible alternatives within your budget. Look for other rental classifieds, which clearly state what tenants are looking for.

Look for properties with good curb appeal. Good interiors will have little effect if the exterior is not appealing.

Identification and selection of tenants should be handled in a scientific and planned manner.

Check the credentials of the potential tenants and, if possible, use the services of a screening agency to short list the right candidates. Prepare the specific questions you would like to ask the candidates during a face-to-face interview.

It would be nice if you could get your home inspected and act on the shortcomings of the report submitted by the inspection agency. This would help you get ahead of the game at the time your property is physically inspected. Tenants are always particular about the necessary fixtures being in working condition.

Utilize the professional services of an accountant to learn about all the tax concessions available for a second home and, in particular, for a rental property. Using a home loan would add to the tax benefits.

Familiarize yourself with all the rental laws in the state in which you propose to rent.
All legal documentation related to rental agreements should be left to a professional attorney.

The various options for a secondary home include its use as a rental property, investment property or a vacation property. Each and every option has its own advantages or disadvantages. You must understand the concessions available for each of these property types and determine the time period you propose to rent the property.

You should also put aside some of the rental income for taxes and maintenance on the property itself.

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