Now is a Great Time to Buy That Rental Property

Q. My wife and I are thinking of buying a house as a rental investment. What should we know before taking the plunge?

A. Buying right is the “secret.” Your first step is to make sure the property is in an area desirable to tenants and suited for appreciation. Next, you want to purchase the property at a price and financing that will allow you to make a profit (and positive cash flow) while renting it out. Don’t forget to include any fix-up expenditures for getting the home in rental shape. You’ll need to create a budget of your expected rental revenue and all costs associated with owning the home – and be sure to allow for contingencies such as vacancies, unexpected repairs and maintenance, and tax and insurance increases.

Seek out the assistance of a competent real estate attorney to create a rock-solid lease document that protects you from problem tenants. You can use the document for future leases and tenants.

Determine whether you’re going to manage the property yourself, or pay a management company – and don’t forget to include management fees into your budget estimates. If you’re thinking of buying or selling a home and need competent and caring representation, please call me at 206-226-0565.