On The Money

4 Important Things to Consider Before Buying a Property for Rental

Hands hovering a house modelBuying a real estate property for rental is risky. If you are a first-time property investor, you need to evaluate the profitability of the property before you commit. You have to factor in a lot of things other than the cost of the property and the profits that you forecast from your tenants.

Here are some tips to help you decide whether a property is a good or a bad investment.

Evaluate the property and the location

You need help from experts like property condition assessment companies like Natura Architectural Consulting to help you zero in on damages and maintenance requirements that you could have missed on your own. Aside from the property itself, you also want to evaluate the location – both the neighborhood and whether prices of properties are on an upward or downward trend.

Have a long-term financial plan

Even if you have the money for a down payment, you need to take into account the monthly payments and the repairs and maintenance costs it requires. If you plan to apply for a mortgage, make sure that you improve your credit score rating first.

Hire a property manager

Managing a multifamily building for rental is not the same as listing your extra guest room for transient travelers. Each of your tenants will need regular assistance whether it’s a request for housekeeping, repairs, or maintenance work. David Mount of The Washington Post suggests getting a property manager that will be the main contact person for the tenants.

Screen your tenants thoroughly

You want to keep the peace within the property. You want to avoid chaos and unnecessary frenzy among your tenants or between your tenants and some outsiders. Thus, it is necessary that you do a background check on those who want to rent your properties to make sure that they have clean records.

Buying a real estate property for rental investment can be lucrative, but to make sure that you don’t get burdened financially or when it comes to the management of the property eventually, you need help from professionals. You also want to take control of the property to keep its value raised.