In the current economic climate, many Americans are looking for supplementary forms of income. While some may choose a part-time job like a grocery delivery or offering freelance services, others are investing in income properties. Rental income can seem like an easy, hands-off way to make money, but property ownership is more than just a financial investment. Before jumping in feet first, here are a few tips for buying your first rental property from Expert Title Company title agents in Deerfield Beach.
Tip #1: Determine Your Finances First
Property ownership is a major financial undertaking even after the sale is complete. Real estate closings in Deerfield Beach mean you are completely responsible for the upkeep and financial obligations associated with said property from that date moving forward. In some cases, this means spending money before you make it.
Before you even begin looking at available properties, consider what you are able to reasonably take on. Will you purchase in cash outright, or will you need to mortgage the property? If so, what terms are you looking for? Do you have the funds to complete repairs if necessary? How will you advertise vacancies to prospective tenants? These and other financial questions are important to consider now rather than when they come up. While title searches in Deerfield Beach can help you be confident in your purchase, you have to be prepared. Be sure you have a solid plan in place, otherwise, you may bite off more than you can chew.
Tip #2: Start with Single Family Homes
An apartment building or condominium may seem like a great option, but if you are just starting out in the rental property business, single homes are best. Addressing the concerns of multiple tenants and handling maintenance needs for larger properties can quickly become overwhelming for inexperienced property owners. It’s easier to focus on a single-family home when learning the ropes than to go straight into a multi-home situation. They also tend to be cheaper, both at initial purchase and for upkeep costs.
Tip #3: Consider Turnkey Properties
Turnkey properties are those which already have tenants and, in some cases, property management in place. This option takes a lot of property ownership pressures off your shoulders but may require more of a financial backing upfront. Consider the pros and cons of taking on a rental property that is already established and do your research. Review the current rental agreements and policies, and should you elect to change anything, give current tenants enough due notice to adjust.
Tip #4: Create a Clear, Written Lease and Screen Tenants Thoroughly
Stepping into the role of rental property owner, it can be easy to focus on filling vacancies over who you are renting your space to. Don’t make this mistake. Be sure you screen each potential tenant thoroughly. Doing so can help protect you from property damage, rent payment issues, and other trouble caused by irresponsible tenants.
Additionally, be sure your rental agreement clearly states the terms of their tenancy. Include the rent’s due date, tenant responsibilities, and terms for eviction. Where title agents in Deerfield Beach can help you to review the terms of your property purchase, a lawyer can help to ensure your lease is airtight and follows legal standards.
Tip #5: Invest in Vacation Rentals
In sunny South Florida, there’s no shortage of tourists looking to get away for a while and enjoy our beaches or amusement parks. As such, looking into short term rental agreements for vacation properties can be lucrative. With more people turning to services like Airbnb rather than hotels, the market is already present. Many such properties are available both short term and long term, so if you have a vacancy, listing it as a temporary vacation rental can help to offset any reduced income. Plus, with the potential for multiple tenants in the course of a month, it could be more profitable than just a single resident.
If you’re ready to take your first steps into rental property ownership, let our team of title agents in Deerfield Beach help! Contact Expert Title Company today.