Owning a rental property can look like an intimidating and dearly expensive task. Though, with a premeditated approach, you can own your first Clinton Township rental property in a short time. Having a rental income to expand your income can help you attain your life goals. Below are the essential elements in determining and buying your first rental property.
Research
Gather comprehensive information about the area you intend to invest in. Identify key features that could appeal to potential tenants, such as nearby parks, shopping centers, public transit accessibility, or scenic views. Additionally, familiarize yourself with tax laws and mortgage rates to accurately estimate the financial requirements for your future investment, including down payments and mortgage expenses for your inaugural rental property in Clinton Township.
Finance
There are many various types of alternatives you can employ when looking to finance, rental property loans or finance options might be different from those convenient to owner-occupied home mortgages. Here are some different types of financing options you might consider:
- Cash—use cash to buy 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 fits your budget and needs - Portfolio lenders—access an adapted portfolio of mortgages available with flexible terms specific to property owners
- 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.
Find a Property
Ally with a local real estate agent to look up where there are properties available in your planned area. Have a general idea of the specifications of the home and how much you are willing to spend. Make sure to have limits and expectations when finding a property. If you find the right purchasing point, you can determine your long-term profitability.
Property Assessment
An indispensable step in the process is conducting a thorough property assessment to determine its habitability and identify any necessary repairs or replacements to prepare the home for renting. Before making a purchase, consider engaging a Real Property Management office to assess the rental home, providing valuable insights into its rentability and recommendations for potential upgrades. Additionally, they can facilitate the engagement of certified home and pest inspectors if necessary. Through this critical step, you’ll gain an estimate of the property’s current and future performance, aiding in informed decision-making.
Would you like a free assessment of your potential rental property in Clinton Township? Please contact Real Property Management Metro Detroit today by filling out the form online or calling us directly at 248-808-6550.
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.
