Buying a property to rent is much different from buying your residence; for the former, your primary focus is to make money. For that reason, here are five things you should know before buying a property to rent or even start to search real estate:
Understand the Intricacies of Being a Landlord
The first thing is to determine whether you are planning to manage the house on your own or leave it under the care of a property management company. If you plan on hiring a manager, you should factor in their fees in your management costs and ensure the property will still be profitable. If you plan on managing the property on your own, know that you will be dealing with tenant disagreements, you will have to available to deal with emerging issues, and you will have to take care of maintenance issues as they crop up.
Focus On Your Potential Tenants
When buying property to rent, focus on what your potential tenants love because that is where the money is. Don't get sidetracked and buy a property that you love because it might not be necessarily what your tenants want. For example, if you hate swimming but your target tenants love swimming pools, ensure you get a property with a swimming pool.
Understand the Local Restrictions
You should also scrutinize local laws and rules that govern building and tenancy issues in your target area. This is even more important if you are targeting properties in other areas other than your current residence because you may not be aware of the local laws. For example, if you don't research such laws, you may end up with a property with an illegal addition because you didn't know the addition was illegal.
Stay Away from Expensive Bells and Whistles
Tenants are not known for taking good care of their dwellings; in fact, they are notorious for causing more wear and tear and "accidents" than actual homeowners. Therefore, it's wise to stay away from delicate properties with fixtures and furnishing that require delicate maintenance. It's even worse if such fixtures and furnishings are expensive to repair or replace.
Watch Out for Safety Issues
Lastly, you should know that your tenants have the right to sue you if they get injured by things that are under your control. Accidents related to electrical malfunctions fire outbreaks or carbon monoxide leaks, for example, can easily make you liable for your tenant's injuries. Therefore, watch out for such dangers when evaluating properties for purchase.