YOU MUST KNOW BEFORE YOU BUY RENTAL PROPERTY Before you buy rental property, consider three things: 1. The expected amount of rental income. 2. The annual expenses you will deserve. 3. And the risks that may come along.
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1. ESTIMATED AMOUNT OF RENTAL PROPERTY INCOME: • When observing for rental property find out how much rent is reasonable to assume given the location and quality of the property.
• You must consider the expenses you will deserve as a property owner.
2. ANNUAL EXPENSES OF HAVING RENTAL PROPERTY: You can break property expenses into both fixed and flexible expenses. •
Fixed Expenses - You will have recurring expenses such as annual property taxes, insurance, routine maintenance and repair items, and the cost of any property management services.
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Flexible Expenses - Remember to set apart funds for major unplanned expenses such as replacing the water heater, air conditioner or heater, roof, fencing, flooring or plumbing.
3. RISKS OF BUYING RENTAL PROPERTY: Before you buy rental property, consider the following risks: • Your property could be seated empty between renters, take down your overall return. You could sustain legal expenses should you need to kick out a bad tenant.
• You could sustain extra repair costs should a bad tenant cause damage to the property. • Rental property can provide a established source of income, but like any investment, you need to understand what you are getting into before you buy.
ADDITIONAL RESOURCES ON RENTAL PROPERTY: • If you are considering investment property, I would highly recommend you visit CIRCLAPP website for Rental Property. • Unlike many of the popular websites on rental real estate investing. Instead, in a very practical way he spells out exactly what it takes to have success when investing in real estate.
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