Getting your first rental property may seem intimidating and expensive at first look. However, you can take ownership of your first Idaho Falls rental property in no time at all with a wise strategy. It doesn’t matter if you’re an accidental landlord or an intentional investor, the income revenue from a rental home can actually cause amazing changes in your life. To begin with, let’s examine the central aspects of finding and purchasing your first property.
Gather whatever information you can possibly find regarding the location you intend to invest in. Watch out for key features that may captivate quality renters, for instance, parks, shopping malls, schools, or proximity to public transit. You should also research and understand what the current mortgage rates and tax laws are so that you can make a reliable estimate for how much you should budget for your future investment.
You can fund the purchase for your new home through various financing options. These options can get you started with your first rental property. However, be sure to take into consideration that rental property loans can be different from those obtainable by owner-occupied home mortgages. Here are some of the different sorts of financing options you can try:
- Cash – One-time payment in full and the property is yours
- Mortgage – Requires a down payment and monthly payments thereafter
Note: there are numerous types of mortgages; do your research to ensure the loan suits your budget and needs
- Portfolio Lenders – Access an adapted portfolio of mortgages available with flexible terms specific to homeowners
- Federal Housing Administration (FHA) Loans – While FHA loans are designed for who are planning to live on the property, there are some options available with FHA that allow FHA-financed homes to have more than 1 unit (up to 4). Using FHA, you could live on the property and have a rental property unit.
- 203K Loans – This loan factors in the cost of home repairs and improvements into the loan amount. This can be useful when looking to renovate a property and rent it out.
3. Finding a Property
Collaborate with a local real estate agent to locate any properties for sale in your intended location. Be assured you have a good approximation of the property’s parameters and how much money you are willing to spend. Don’t be reluctant to establish restrictions and believable expectations when looking for real estate. When you get the right purchasing point, you can then verify its long-term earnings.
4. Property Assessment
Before finalizing the purchase, you might want to schedule a property assessment. Through this, you would be able to determine whether or not your rental property is ready for immediate use or if it still needs to go through repairs before making it available for tenants. In this very important step, you should be able to obtain an estimate as to the property’s present and prospective performance.
At Real Property Management Southeast Idaho, we can look at the property before the purchase is finalized. We can then give an honest assessment of its rentability and suggest upgrades that you may need to think about. If the circumstance requires it, we can also make a suggestion for a professional home and pest inspector.