Follow These 7 Steps When Purchasing a Single Family Home
Buying a single-family rental home is a huge investment, but one that can pay off tremendously if you do it right. Here are six steps you can take to make sure that happens.
If you send a real-estate agent criteria (say, a 2-bedroom home under $150,000), they can start sending matches your way almost immediately. If you don’t want to go this route, utilize online resources like Craigslist, Zillow, and the MLS listing service.
Research and Calculate
Research the home-buying process in general, plus any home you’re interested in, its surrounding area, and what the home can fetch on the rental market. If your goal is to make most of your money from appreciation, then you might buy a different home than if you’re looking purely for rental cash.
When figuring out if a home will turn a profit, you’ll have much to consider: The mortgage payment, expected rent, property management fees, insurance, taxes, HOA fees, and many other factors come into play.
Get Your Financing in Order
Getting pre-approved for financing will help with the previous step in figuring out what you’ll owe month over month, and in the next step by ensuring any offer you make will have some weight behind it.
Offer to Buy
If you used a real estate agent to get the lead in the first place, you can continue working with them when you make your offer. But if you’re on your own, prepare to negotiate. Don’t feel stressed by this prospect–it’s a completely normal part of real estate.
Close on the Home
Once your offer is accepted, there’s still work to do. Be patient, flexible, and responsive during the closing process. Don’t give in on every issue, but keep the big picture in mind when making decisions on where to give ground.
After you’ve purchased the property, it’s essential to manage it correctly. If you feel up to the task yourself, go for it. Just spend some time learning what goes into property management. But if you’re the type who wants a more hands-off experience, consider hiring a property management company.