Rental properties are a smart way to ensure that you have an income flow each month. Long before you can become someone's landlord though, you must purchase real estate. If you are new to buying rental property, you must be careful of pitfalls that sink other first-time investors. To help you get started, here are some first-timers' mistakes and how you can avoid them:
Valuing Price Over Quality
Since this is your first property, you might be tempted to focus more on the cost of the property than the actual quality of it. However, this could lead to major problems later. A cheap property could be a mistake for several reasons, including the need to make major repairs to make it livable for tenants.
There is also the possibility that the property was inexpensive because it is in a bad location. For instance, if the property is in a crime-ridden neighborhood, you could have trouble finding tenants who are willing to living there.
Before investing in a cheap property, take the time to explore why it is priced so low. You want to be sure whatever the reasoning, you can handle any problems that could come with the property. If not, you and your real estate agent can continue the search for an investment.
Failing to Attend the Home Inspection
You know that having the rental property inspected is important. However, attending the home inspection might not seem like a big deal. After all, the home inspector will provide you with a report, right?
Not attending the home inspection is a missed opportunity. Although the report will be detailed, you are missing out on the chance to ask the inspector questions about the property. For instance, you can get more insight on the plumbing, electricity, and HVAC system if you are there to ask questions that are not covered by the report.
In addition to this, you are potentially missing out on a chance to have the price of the home lowered. Armed with the information you learned from the home inspector, you can attempt to renegotiate the sale price of the home and save money on your first investment. The funds could be spent towards your ongoing maintenance costs for the home.
A real estate agent knows the challenges that come with buying rental property. Work with one to help find the right investment and to avoid mistakes that could impact your first experience as a rental property owner.Share