Becoming a rental property owner is one of the ways to supplement your income.
Many of the rental business magnates that you know of started with just one rental property, and as they say, the rest is history. As you become more familiar with this business, you can go ahead and purchase additional rental homes to rent and leave a mark in the real estate business.
So, how can you become “that” rental property owner?
1. Learn, Learn and Learn Some More
Take time and learn all there is about the rental property business so that you make sure you come up with decisions based on facts. Read journals, join rental forums, and then speak with other realtors to understand what happens in the market. Supplement this input by watching videos and engaging other experts on the topic.
2. Know How Long You Plan to Hold onto the Property
After you learn what is to be learned about the business, the next consideration is to understand for how long you wish to hold onto the rental properties. Remember that the longer you hold onto the property, the more you need to set aside in terms of the investment, especially in terms of repairs and maintenance costs.
3. Create Your List
Next comes the point where you create a list of the people that you will work with in the business. You need to have investors, property management firms and realtors, among many. You can create the list from the people that you meet on the local property owner association.
4. Find Homes that are For Rent in the area
This is a critical part of the whole plan – finding the homes that are up for rent in the area. You need to make sure you talk to the owner directly so that you inquire about their desires to sell the property. Most of the owners are renting out the homes because they don’t have the time to list it for sale or they have been unable to sell the property. In such a situation, they are so happy to unload this property to you, the buyer.
You can also set up a monitoring system that alerts you when such homes come up in the area. You can do this easily using third party software that is available on the internet.
Once you have identified a few homes that match your criteria, you need to put your finances in order. Apply for funding and get pre-qualified before you start bidding on the homes.
5. Pre-purchase Inspection
Before you go ahead and purchase the home, you need to get a professional to inspect it. The aim of inspection is to identify the need for repairs and then calculate the necessary expenses related to the repairs so that you make the home habitable. Consider these costs in regard to the projected profits so that you aim for profit and not losses.
6. Research and Purchase
After the inspection, take time to research rental rates in the area and consider the rental charge, making sure you pay for the mortgage in the shortest time possible. After the reseach, you need to start making the necessary repairs so that you don’t delay putting the home on the market.
You also need to make sure the home is safe for use, and that there won’t be any accidents arising from negligence. You need to avoid a premises liability accident lawsuit that can kill your dream of becoming a rental property owner.
You can become a property owner without having to build the homes from ground, all you need is to get rental properties on sale and purchase them.