Are You Ready to Buy Your first Rental??
So, you’ve read our articles on how amazing owning a rental property is, but you don’t know if you are ready for the first big step in becoming a rental guru – buying your first one! This is a very scary time for every potential landlord and it stops a lot of people from going through with it, but I’m here to help you through this whole process and make sure you make all the right choices along the way!
there are three main steps when deciding whether or not you should become a landlord:
1) The cost of the rental
The down-payment is usually the first thing people take into account when looking at the cost of a rental, but you also have to be wary of the expenses associated with the month-to-month owning of it. To be safe, you always want to be able to afford the mortgage and utilities costs in the case that there are no tenants in the house. This is a safety net that will make you feel much more comfortable about buying the property – in the worst case scenario here you are just building equity in a second home!
2) Your Financing
If you do not have good credit, you will be forced into a very high interest mortgage (if you even get one) so you won’t be able to make anywhere near as much with the rental property. Even though your interest on the mortgage is a tax write-off, you don’t want to spend money that you don’t have to – fix your financing and credit score first (ex: pay off whatever loans besides your mortgage that you currently have) and then think about buying a rental property.
3) How much time do you want to put into your investments?
This is probably the most important question to ask yourself, do you want to put time into your investment or do you want it to be completely passive? If you want huge returns with a little bit of work, then rentals are for you. But if you don’t want to put in any work and you’re okay with 2% APR, then just leave your money in the bank!!
To sum it all up, just make sure you can afford the house, get a good mortgage and be ready to put a bit of time into it. If you can do all of these things then you are ready to become the rental guru you know you can be! Just contact us and we’ll help start your empire!