Tips for Buying a Rental Property
by Nolan Ramos
Making the decision to purchase a property to rent is one of the smartest financial decisions a person can make. Often the rent paid is enough to cover the mortgage and may even leave a little extra in your pocket. Once you have made the financial decision to invest your money, now you are faced with choosing the right property to spend your hard-earned money on, and that can be a daunting decision. Here are a couple of tips for you to keep in mind when making a decision of which property to purchase.
Location, location, location.
If you are new to an area or the city, be sure to do thorough research on the neighborhood. Spend some time in the area walking around, check out the local coffee shops to get a feel for the area. You may fall in love with the area, or you may realize that there are a few to many unsavory people for your liking. Think about your tenant’s regular day-to-day life, like how far away are your local amenities? Are they able to walk to them, or is it a 10-minute drive? Lastly, how bad is the traffic in that area? How long does it take to walk to the nearest SkyTrain? If you choose wisely, these are all selling points for potential tenants, which raise the rental cost.
To Inspect, or not to Inspect?
When purchasing a home, many people want to avoid the additional expense of hiring a home inspector. Still, they can often save buyers money in the long and short run! Just as we use realtors to find us the home that we want, we should use home inspectors to qualify that home. They will be able to detect early warning signs most people aren’t trained to look for, saving you from huge expenses down the line. They may even find more minor problems you can use to negotiate a better price with the seller! And if they find there is nothing wrong, then you will sleep soundly knowing you made the right purchase.
Keep Age in Mind
If you a purchasing a newer property, look into the warranties on the home. Many warranties may apply, such as building envelope, windows, structure, appliances, and the roof. Check how much time is left on the warranty, if any at all. With aged buildings, look into when the major maintenance activities were last complete, such as the hot water heater, roof, furnace, and gutters. If older properties are well maintained, they may be in better condition than newer ones, so don’t let the age fool you!
Don’t be afraid to purchase something that requires a little TLC. Many people are turned off by the thought of buying something that requires extra work post-purchase. But there could be some serious savings to be made by putting in a little extra effort, not to mention you’ll be increasing the value of the property! Also, once you’ve completed whatever renovations are needed, the space can be listed a newly renovated and may rent out for more.
There are many factors to take into consideration when choosing the right property to purchase, and this article only covers a few factors. But by reading articles like this, you are arming yourself with the tools required to make the correct decision.