Owning a rental property can be a daunting and pricey task. However, with a calculated approach, you can get your first Capitol Hill rental property in a short time. Having a rental income to supplement your income can be beneficial to getting closer to your life goals. Below are the main factors in locating and purchasing your first rental property.
Collect as much information as you could about the area you plan to invest in. Look for key features of the area that might attract tenants, such as a park, shopping, a nice view, or distance to public transit. You should also read up on the tax laws and mortgage rates so that you can get a good estimate as to how much you should prepare for your future investment and cash needed as down payment and mortgage costs for your first Capitol Hill rental property.
When aiming to finance, there are various types of options you can utilize. Rental property loans or finance options are sometimes different from those available to owner-inhabited home mortgages. Listed below are some different types of financing options you might try:
- Cash – utilize cash to purchase a rental home.
- Mortgage – pay a down payment and then monthly mortgage payments.
Note: there are many types of mortgages; do your homework to ensure the loan suits your needs and finances.
- Portfolio lenders – get hold of an adapted portfolio of mortgages offered with flexible terms exclusive to property owners.
- Federal Housing Administration (FHA) loans – while FHA loans are meant for those planning to live on the property, there are a couple of options available with FHA that allow FHA-financed properties to have more than 1 unit (up to 4). You could live on the property while also offering a rental property unit using FHA.
- 203K loans – this loan factors the cost of property improvements and repairs into the loan amount. This is useful when looking to renovate a property and rent it out.
Find a Property
Work with a real estate agent local to your targeted area to find out where there are properties available. Have a general idea of the property’s specifications and your spending budget. Have definite limits and expectations for your property hunt. Once you reach the right purchasing point, you can work out your long-term profitability.
In this process, a crucial step not to be missed is to have a property assessment of the location to establish if it is livable and what needs repair or replacement to ensure that the home is rent ready. Before purchasing, you can request for a Real Property Management DC Metro office to assess the rental home to provide advice regarding its rentability and to share suggestions for upgrades and other things. They can also recommend a certified home and pest inspector if there is a need for one. Within this important step, you can establish an estimate as to the property’s current and potential performance.
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.