4 Key Considerations Before You Purchase A Rental
Rental or vacation properties, you’ve heard of them, and maybe some of you have even thought about owning one yourself.
Owning a rental property if done correctly, is a great way to make passive income and set yourself up for early retirement. There is also the benefit of capital gains, which means the revenue from your rental property could be tax-free. But before you go out and buy a rental, we have a few things you should consider before making that important purchase.
Review your finances
Real estate investing is one of the few ways to put little money in and get an incredible return. In order start the process you need take look at what you can afford and how much money you’ll need to put for the down payment. You can always start the process by checking what loan rates you are eligible for by going to the Galaxy Lending site and finding your loan rate.
We recommend buying a property that is local to where you live, but again that depends on your location and if the rental market is good in your area. The other reason we suggest buying locally is that it makes it easier to check in on your properties regularly and to ensure everything is working with your tenants. Thankfully, Scottsdale is a great rental property location. We have lots of local tourist events, for example, we have spring training with all the baseball teams and during the fall, we have snowbirds flock to our great weather. Again it’s not a must to buy local, it’s just a recommendation.
Do your Homework
Always do your homework when looking at properties and look at why it’s a good idea for you to purchase a rental property. Do not be afraid to shop around and compare rates. The numbers, the research, and speaking to a Galaxy Lending specialist will help you during the decision making process. Analyze each property with a fine tooth comb, but also go about it with a positive attitude. Each potential rental property is going to have some problems, but with practice and research, you’ll be able to find the right place for you. Once you found that perfect place and are ready to rent it, be mindful and do your homework on who you rent out your property to. As a new landlord, you will want to be sure your investment is protected and we will cover this more in the next section.
Consider Your Renters
Being a landlord brings a unique set of challenges, especially since your rental property is a big investment. When it comes to renting out your rental property, our advice is to not rent to just anyone. Remember this is your investment, treat it like your future depends on it because, in a sense, it does. We recommend doing a background checks and getting referrals from any new renters. You want to know who’s going to be in the house and what their ideas of an kept home are. But keep in mind, even with the best tenants, your rental can suffer some wear and tear from just general use.
When you are ready to take the leap to rental property ownership, go to our Galaxy Lending site and see what your loan rate would be. From there you can also speak to a Galaxy loan specialist, who will be able to give you expert advice on how to apply for a great loan at an affordable rate.