Starting Point works with real estate investors of all skill sets, helping them to develop their investment strategies. These are just a few guidelines to consider when looking to purchase a single family rental property. To learn more about investing in rental property, or to see a list of our available homes, check our website regularly and follow our blog!
- Research homes in a market that is financially stable, and that you can afford. Make sure the average rent price is more than what your mortgage payment on the home will be. Check and see how many days this home has been on the market- they may be willing to lower the price the longer it has been on the market. Don’t invest in a property that you aren’t sure of- research every investment, and understand the market where the property is located.
- Determine the cost of renovations before purchasing. If you are going to spend an additional amount of money rehabbing the property, and it will be off of the market for a while, make sure to include these amounts in your budget. Don’t overlook small fees like painting walls, and fixing door knobs- everything adds up! Add these repairs to the initial purchase price, and see if the investment still appeals to you.
- Understand what the cost of vacancy will be. If there’s no one renting your single family home, there is no income. Therefore you will have to pay the mortgage fees, maintenance and repairs all out of your pocket. Some landlords choose to offset this risk by adding an additional amount to the monthly rent of their tenants, in the event they are left with a vacancy.
- Understand what your average additional income will be from the property, and evaluate your bottom line. If after expenses have been accounted for- including taxes, repairs, and mortgage, you’re left only making a couple hundred dollars per month, determine if this is the right investment for you.