Buying An Investment Property? 3 Tips To Keep In Mind
Are you looking to buy a second home as an investment property? If so, you will need to put plenty of thought into where the property is located and how you plan to make money off of it. Here are some things to keep in mind before you purchase your investment property.
Don't Count On Rent All Year Round
If you are buying a rental property, do not make the mistake of budgeting by factoring in a full year worth of rent. It is likely that you will have plenty of time where the property isn't occupied, which means you are not making any rental income.
For example, if you are renting the property out for short-term rentals, such as to people on vacation, there will be many highs and lows during the years where people have interest in the property. Be very conservative with your estimates on the rental income you'll bring in, and adjust the rental rate accordingly to compensate for your down time.
Don't Use The Property At Peak Times
You may be tempted to use your own rental property at times where you have days off. This can include holiday weekends, spring break, and around Christmas. If you are renting out to people for short vacation stays, you will be losing out on a lot of potential income by using these dates for yourself. Holiday weekends are when vacation rentals can charge a premium because of the amount of people looking to rent.
If you want to use your own property for a vacation, plan to use it during off times during the year when you do not expect to have any renters in the place.
Use A Realtor
When picking a location for a rental property, you'll want a place that is a popular area with tourists or close to places where people work. You really need to work with a realtor that can help you find a property with renting in mind so that you can maximize your potential income. If you purchase a house purely based on what you are looking for in a house, you could make the mistake of purchasing a property that doesn't appeal to renters.
These are a couple of things you'll want to consider when purchasing a rental property. For more tips, your real estate agent can help guide you through the entire purchasing process and lend their advice along the way. To learn more about new home real estate, contact a real estate agent in your area.