Obtaining your first rental property can seem like a scary and costly task. However, you can be the owner of your first Blacksburg rental property in no time at all when you have a good strategy in place. Whether or not you’re an accidental landlord or an intentional investor, the income revenue from a rental property can definitely transform your life. To set things in motion, let’s check the salient elements to locating and buying your first property.
1. Research
Get as much data as you can about the location you want to invest in. Look out for key features that may interest quality renters, such as parks, shopping malls, schools, or proximity to public transit. Also, you should study and learn about the mortgage rates and tax laws so that you can make a good estimate of how much you should budget for your future investment.
2. Financing
There are many ways to secure financing for a new home— especially one you plan to get for a rental property. However, don’t fail to consider that rental property loans are not the same as those granted to owner-occupied home mortgages. Here are a handful of different categories of financing options you can try:
- Cash – One-time payment in full and the property is yours
- Mortgage – Requires a down payment and monthly payments thereafter
Note: there are numerous types of mortgages; do your research to ensure the loan suits your budget and needs - Portfolio Lenders – Access an adapted portfolio of mortgages available with flexible terms specific to homeowners
- Federal Housing Administration (FHA) Loans – While FHA loans are designed for who are planning to live on the property, there are some options available with FHA that allow FHA-financed homes to have more than 1 unit (up to 4). Using FHA, you could live on the property and have a rental property unit.
- 203K Loans – This loan factors in the cost of home repairs and improvements into the loan amount. This can be useful when looking to renovate a property and rent it out.
3. Finding a Property
Work together with a local real estate agent to pinpoint any properties up for grabs in your desired locale. Be confident you have a good estimate of the property specifications and how much capital you are amenable to spend. Be brave enough to stipulate limits and observe realistic expectations when trying to find property. When you pinpoint a suitable purchasing point, you can then find out its long-term financial gain.
4. Property Assessment
One of the last things you will need to do before closing the deal is to schedule a property assessment to find out if your rental property can be used immediately for renting out to tenants or if you still need to have it repaired. In this significant step, you will be able to get an estimate and discover how well your property is performing. You will see its current and potential performance.
At Real Property Management Insight, we can take a look at the home before buying it and give an honest assessment about its rentability or give recommendations for upgrades and repairs that you may want to look at. If required, we can also refer you to a professional home and pest inspector.
Are you interested in a free assessment of your potential rental property in Blacksburg? Please contact us online or call us directly at 540-998-6917.
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.
