Buying rental properties and becoming a landlord can be a lucrative side hustle. If you own enough properties, the profits can become your primary source of income. If you’re considering a rental property, there are many considerations and decisions to ensure it is a profitable venture and not a source of frustration.
Before you buy a rental property, read on to learn tips for new landlords and how to create a successful real estate business to support you and your family.
When Is It a Good Time to Buy a Rental Property?
As with all things, timing is everything. The right property may come along any time during the year, but the rental property market has a seasonality.
The fourth quarter of the calendar year is usually the best time to purchase a rental property. There is less competition for properties as people prepare for seasonal holidays and are unlikely to hunt for houses during cold weather. Sellers also look for tax advantages before the end of the year, making this an ideal time for buyers.
Spring is also a good time to look for rental properties. Most people put their homes on the market in the spring, and the warmer temperatures will make it easier to give them a thorough inspection.
How Can I Finance a Rental Property?
There are many ways to find the money to buy a rental property. Conventional loans and home equity lines of credit are two of the most common ways to get the funds you need.
Another option is rental property loans. Lenders like LendSimpli specialize in loans for real estate investors and rental home buyers. They offer competitive rates and a reliable lending experience for new and established rental property investors.
What Kind of Rental Property Should I Buy?
This is a common question from new rental property investors. The general rule of “location, location, location” applies here, but there are other considerations like property taxes and crime rates. When selecting a rental property, consider these features:
- Neighborhood – If you want to turn over your renters frequently, look for a home near a college campus. Want to rent to the same tenant for many years? Look for properties where families currently live.
- Schools – Families look for homes that are near good schools. Consider rental properties within proximity of good schools if you want families for tenants.
- Amenities – The National Association of Realtors found homes near parks and other outdoor recreation areas generate higher sale prices and rental rates. Look for properties near parks, playgrounds, and public transportation.
Should I Buy a Rental Property?
If you want to supplement your income, a rental property can be an effective way to do it. The profit per property can vary depending on the size and location of the home, so you may need to own multiple properties if you want to make it your primary income. Before you buy a rental property, line up your financing through a bank or specialty lender, find the best location to generate profitable rents, and consider amenities that attract the tenants you want.
To learn more about rental property investing, please explore the rest of our site.