If you are considering purchasing a home to use as a rental property, then now may be the perfect time to do so. The real estate market is sluggish right now, as job uncertainty and the rising cost of gas has led many people to choose renting over owning a home. Because less people are buying homes, many people who are selling are practically giving their homes away!
Interest rates are also incredibly low right now, so it is a great time to lock in a historically low interest rate for low monthly payments. There are also an abundance of foreclosures and short sales, so you can really get a great deal on a quality home. There are some things to look out for, however, if you have decided to purchase a home to be used as a rental.
When purchasing a home, you always want to ensure that there are no huge issues with the property, such as a bad roof or plumbing problems. Such issues can be a huge headache for a landlord, as they can cost thousands of dollars to repair. Get an inspection done prior to purchasing the home and ensure that you are not going to have to put too much money into the home for things that are incredibly expensive. Look at the neighborhood you are buying in and determine if it is one where you will be able to charge enough for rent to cover expenses or not. You do not want to end up losing out on your investment because no one would rent the home at the price you needed them to pay.
Also, when deciding on whether to buy a home to be used as a rental property, it is vital to tally up all of the cosmetic changes that will need to be made. Once again, you never want to put more money into a home than you can make back from the renters. If possible, do renovations yourself and make smaller changes that have a big impact, like buying new appliances or having carpets cleaned. Little things can make a home really stand out to potential renters, so make sure the home is cosmetically attractive if you hope to make a profit.
Owning a rental property can be a great investment and is far safer than many other investment options, as long as you purchase the right property at the right price and make smart renovations.
By: Ken Boutilier
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Ken Boutilier is an Atlantic Canadian based real estate investor, trainer, speaker, consultant and entrepreneur who has combined his knowledge of real estate investing and Internet marketing to train and teach others how to increase their cash flow through successful real estate investing. Learn more at Real Wealth Atlantic.