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Five Items to Consider When Shopping for a Rental Property

Low prices and the abundance of properties on the market are not only inspiring renters to take the necessary steps to becoming homeowners, but are also enticing many current homeowners to become property investors.  According to experts, the cost to rent will spike 7% or so in each of the next two years to a national average that will top $800 per month. With plenty of bargain properties on the market and an increase in demand for rental housing on the horizon, now is the perfect time to purchase a rental property.

Investing in and maintaining a rental property is not an easy task and may be daunting for the first-time investor.  Investment property ownership can be filled with surprises that can sap your returns. Before starting your search, take a look at the top five items you should consider when shopping for an income property.

Property Type
As a landlord, it's important to find a property and a neighborhood that will attract your ideal tenants. Residential, single-family homes seem to be the best investment value as they attract families and couples that are typically responsible and financially stable.

Condominiums also offer good value, are less expensive than single family properties and require minimal maintenance. Majority of condo property upkeep is covered by the complex's home owners association, saving both time and energy. Talk to your Country Home Lending Source real estate and mortgage professional to discuss the appreciation potential of both property types and decide which best fits your financial situation.

Neighborhoods
When searching for properties on your own or with your real estate professional, take the type and quality of the neighborhood into account. For example, if you buy in a neighborhood near a popular vacation spot or near a university, chances are that your pool of potential tenants will be mainly seasonal vacation-goers or students, meaning you will face vacancies on a fairly regular basis.

Amount of Listings and Vacancies
Though many vacancies in the neighborhood may signal a seasonal cycle, it may also indicate the neighborhood isn't desirable. Do your research and work closely with your Country Home Lending Source real estate and mortgage specialist to gather market trend information on the neighborhoods you're interested in.

Property Taxes
Property taxes vary from city to city, and as an investor planning to make money from rent, you want to be aware of how much will be lost on taxes. High property taxes can sometimes be justified if the neighborhood offers many desirable amenities. Talk to the homeowners within your desired rental neighborhood, or contact your Country Home Lending Source real estate and mortgage specialist to learn the tax information.

Average Rent
Know the average rent in your desired area. Work with your Country Home Lending Source mortgage professional to determine your monthly financial commitment for the new purchase and calculate whether or not the rental property will cover your expenses. If charging the average rent doesn't cover your full mortgage payment, taxes and other expenses, then keep looking.

Once you've narrowed down your rental property search to the house, condo or apartment unit that will provide the best value and a positive projected cash flow, keep your expectations realistic. Real estate investing doesn't start with buying a rental property; it begins with creating the financial situation where you can buy a rental. Make sure that your finances are in a healthy enough state to weather the waiting period before the property starts creating projected cash flow. As with any investment, consult the experts, make careful choices and weigh the costs and benefits of your actions before diving in.

Keeping You Informed
Country Home Lending Source mortgage professionals are dedicated to keeping you informed of the latest market trends and mortgage options. Visit Country Home Lending Source online at http://homeloansokc.com, or call us today at  405-360-1995, to obtain custom loan options designed to fit your needs and help you obtain your home goals.

Keith Siess
Country Home Lending Source
Phone: 405-360-1995
Fax: 405-360-1697
Email: keith@homeloansokc.com
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Call me at 405-820-9506 and I'll be happy to talk with you and help any questions you may have.

Larry Minson
Old Town, Realtors
Cell:  405-820-9506
Email:  lminson@cox.net
Facebook: www.facebook.com/larryminsonrealtor