Purchasing your first rental property can appear to be a challenging and pricey task. However, you can be the owner of your first Dallas rental property in no time at all when you have a good strategy in place. Whether you’re an accidental landlord or an intentional investor, the income revenue from a rental home can really have a positive effect in your life. To get rolling on this new adventure, let’s check out the prime building blocks to recognizing and taking ownership of your first property.
1. Research
Gather whatever information you can possibly find regarding the location you intend to invest in. Be alert for key features that may invite quality renters, such as parks, shopping malls, schools, or proximity to public transit. You should also research and understand what the current mortgage rates and tax laws are so that you can make a reliable estimate for how much you should budget for your future investment.
2. Financing
There are plenty of choices regarding financing; many ways to get the home that you want for a rental property. However, don’t forget to take into account that rental property loans can differ from those accessible to owner-occupied home mortgages. Here are several different forms of financing options that you can try:
- Cash – One-time payment in full and the property is yours
- Mortgage – Requires a down payment and monthly payments thereafter
Note: there are numerous types of mortgages; do your research to ensure the loan suits your budget and needs - Portfolio Lenders – Access an adapted portfolio of mortgages available with flexible terms specific to homeowners
- 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.
3. Finding a Property
Collaborate with a local real estate agent to locate any properties for sale in your intended location. Make sure you have a good approximation of the property’s parameters and how much money you are willing to spend. Be brave enough to stipulate limits and observe realistic expectations when trying to find property. When you discover the proper purchasing point, you can then ascertain the income it can give you long-term.
4. Property Assessment
One of the things you need to do before handing over payment is to go through a property assessment. You need to know if your rental property can be ready for tenants immediately or if you still need to fix a few things. In this significant step, you will be able to get an estimate and discover how well your property is performing. You will see its current and potential performance.
At Real Property Management Legend, we can look at the property before the purchase is finalized. We can then give an honest assessment of its rentability and suggest upgrades that you may need to think about. If required, we can also refer a professional home and pest inspector.
Would you like a free assessment of your potential rental property in Dallas? Please contact us online or call us directly at 214-227-2404.
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.
