How To Buy A Rental House
by Joe Trometer
If the rent you can collect is more than your mortgage payment and upkeep, buying a rental house sounds very attract, doesn't it?
I wish it were that easy when I first started as a landlord in 1987, and know I know...
The job of a landlord is far from simple!
The downside of the land-lording business is not so much about the paperwork or the money,
the stress comes (like any job stress point) from dealing with problematic tenants!
When we are prepared with management and people skills, dealing with troublesome tenants becomes routine and a matter of procedural paperwork to evict and re-rent.
I want to be upfront about the glory, and lack there of, about buying rental houses.
The second downside of buying rental property is the unforeseen costs of maintenance and repairs hidden behind the walls, attic, or within the foundation of a rental house...
...Plan to pay for a thorough Building Inspection, review the Seller's Disclosures, talk with the neighboring property owners, and check with the local Building Department to better prepare before you invest in rental housing.
That said, how to buy a rental house get's easier.
Next, check the demographic of the Demographics of the City you want to invest in. That can be found here on ask-the-rehabber.com in the (nav-bar in the left column) Rehabber Links.
There you'll find Statistics about All U.S. Cities - Demographics... or you can go directly there now Stats about all US Cities.
Bank Financing, Cash, or Private Investors?
Leveraging rental properties against rental income statistically,
has proven to give a higher Return On Investment (ROI) than paying cash for a property, however...
... A free and clear rental property from paying cash has less downside of failures many landlords have faced from over extending their credit and taking on too much debt!
We never know certain how our financial future can evolve, to me, a free and clear rental unit is golden!
Private Investors are another alternative however,
they're usually more expensive that Bank Financing.
Read more... Private Investor Funding.
Buying a rental house is and Investment!
To determine your financial suitability for an investment property, I recommend you consulting with your Tax Adviser or CPA, your Attorney...
And just as important...
...Your Spouse, Family, and or Partner, to be in agreement with you on your real estate investor decisions,
enhances the outcome of a successful landlord-rental business!
Some Basic Rental Investment Insight:
1) Run A Test Advertisement Before You Buy!
"House for Rent", or "Apartment for Rent",
to see what response you get,
what renters are looking for,
how much they're willing to pay for a rental unit,
in the area your looking to buy in.
2) Property Taxes and Building Insurance.
Check with the City Assessor to see how your property taxes will adjust after you buy your rental property.
Contact your Insurance Agent for Building and Fire Insurance,
Liability Insurance and considerations for an umbrella liability insurance policy.
3) Have an Exit Strategy Plan!
How long do you want to be a landlord?
When do you plan on selling your rental properties?
How much do you expect to sell your rentals for?
How to buy a rental house is mostly determined on personal choices and lifestyle.
There's more to it than,
1) Make an offer on a house and,
2) Rent it out!
As you decide,
like I have for myself,
to invest in real estate property,
do your "Due-Diligence (research and follow-up).
Your more than welcome to ask your questions here on
Ask-The-Rehabber® at rehabber answers to questions.
Find more articles on how to buy a rental house in the real estate investing news and write your commentary here like me.
The article I found related to this one: "How to Buy a House and Rent it Out".
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