Owning a rental property can be costly and intimidating. However, with a calculated approach, you can get your first Framingham rental property in a short time. Having a rental income to boost your income can be beneficial to you achieving your life goals. Below are the key parts to finding and purchasing your first rental property.
Research
Gather as much information as possible regarding the location you plan to invest in. Search for key area features that might bring in renters, such as a park, shopping, access to public transit, or a lovely view. Moreover, you need to learn about the tax laws and mortgage rates to give you a solid estimate as to how much you should budget for your future investment and cash needed as down payment and mortgage costs for your first Framingham rental property.
Finance
When planning to finance, there are various types of options you can utilize. Rental property loans or finance options might differ from those mortgages offered for owner-occupied properties. Here are a couple of different types of financing options you might try:
- Cash – use cash to purchase a rental home
- Mortgage – pay a down payment and then monthly mortgage payments
Note: there are many types of mortgages; do your homework to make sure the loan matches your finances and needs - Portfolio lenders – access an adapted portfolio of mortgages available with flexible terms exclusive to homeowners
- Federal Housing Administration (FHA) loans – even though FHA loans are designed for those planning to reside on the property, there are some available options that permit FHA-financed homes to have more than 1 unit (up to 4); you can have a rental property unit while also living on the property using FHA
- 203K loans – this loan works in the cost of home repairs and improvements to the loan amount; this is useful when looking to renovate a property and rent it out
Find a Property
Work with a real estate agent local to your targeted area to find out where there are properties available. Get a general idea of the specifications of the property and your spending budget. Make sure to have limits and expectations when property hunting. Once you get the right purchasing point, you can then determine your long-term profitability.
Property Assessment
In this process, a crucial step not to be missed is to have a property assessment of the location to establish if it is livable and what needs repair or replacement to ensure that the home is rent ready. You can request Real Property Management Metro West-Worcester to evaluate the rental property to give advice regarding its rentability and to make recommendations for upgrades and so on prior to buying. They can also recommend a professional home and pest inspector if needed. Within this important step, you can establish an estimate as to the property’s current and potential performance.
Do you have any questions or do you want a free assessment of your potential rental property? Please contact us online or call us directly at 508-329-6000 today!
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.
