This year saw US home prices grow by 12%. While many predict the buoyant market could go both ways, rental property will always remain a great investment. But do you know how to find one that’s right for you?
When looking, there are a few considerations to make. Read on as we discuss how to get a rental property.
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If you don’t have the cash to buy outright, then you still have a number of options for financing a rental property. The first is owner-occupied financing, known as house hacking. This is where you buy a multifamily property and live in one of the units yourself.
For this, you often need less of a downpayment. For example, with a strong credit score, you may only need to put as little as 3.5% down as a deposit.
Other than that, rental property loans are available. One advantage of this is that the lender often looks at the deal itself, and what income the property will bring. This is in contrast to many loans where the focus is on your reliability as a lender.
Generally, interest rates on investment properties are higher than that of homeowner loans. You will also need a good credit rating. Follow this link for more info.
Finding a Market
Once you have the money, it is time to find a property. If you are buying your first rental property then it often helps to go where you know. A place you have lived or worked in will give you a better idea of the demand and rental incomes available.
However, just because you lived in a place does not make it the perfect real estate investment. Look a little further afield, within an hour’s drive of your location. Search for places that are going up in status and value, with middle-class people moving into the area.
Finding the Property
There are a number of tactics you can employ when trying to find a good rental property deal. Start by watching the market regularly. You may get your first foot in the door with bargains that come on the market or be able to make low offers on ones you have noticed hanging about for a long time.
Consider looking for vacant properties in the area. Many people craft letters to owners, asking them if they would be willing to sell. For many people, a vacant property is simply costing them money and selling could be a good option.
Finally, take yourself off the major search engines and MLS listings. Speak with wholesalers, ask local estate agents to contact you before something is listed, and look in traditional print media. All of this can lead to buying your first rental property.
How to Get a Rental Property
Now you know how to get a rental property, you can begin the search. Put your financing in place, choose an area and keep an eye on the market. Take your time and the perfect property will soon come up.
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