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Are You Ready To Invest In A Rental Property?

Posted by Susanna Haynie on March 23, 2014
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How to buy a rental home , passive incomeHome  prices are on the rise. In fact, 2013 prices increased a whopping 12% compared to 2012 here in Colorado Springs. Is it too late to find a ‘deal’ in real estate?

The time of rock-bottom prices are over, but there are still great homes at good prices to be had.  Interest rates are still low, home prices are expected to rise only a few percent and the housing market is only in it’s second year of recovery – the question is: Are you ready to become a  real estate investor? Ask yourself a few question before you go out house hunting:

  1. What are your expectations? Rentals are a long term investment – are you ready to keep your homes for 10 years or longer? Have you made a decision if you’d like to manage the property yourself or maybe you’d like to pass the property (-ies) on to a management company? What are your expectations in regards to your return on investment? Have you assembled your “investment pro team” already? ie. Real Estate Agent, Property Management Company, Bank/Finance Professional, Tax Professional and so on.
  2. What are you looking for? Are you searching for a single family home, a duplex/triplex, or an apartment building? Residential or commercial properties?
  3. Are your financially ready to invest into a rental? How will you finance your investment? The larger your down payment, the more secure your investment is and the earlier you are able to reap the benefits. A down payment of at least 25% and a great credit score will give you the best interest rates.  How will any investment in rental property change your tax obligations?
  4. “Learn” your town: The old saying when buying real estate ‘location, location, location’ , is well known and absolutely true. You can change anything about a property, but the location.  Search for a property that is located in an area that has average sales prices but seem to ask for higher rents. Homes within a highly rated school district tend to demand higher rents and rent quicker.

If you have any questions please do not hesitate to call/text me at 719-321-0800 or email me at susanna@co-regroup.com. I can set you up with listing alerts, that way you’ll always know what is trending in your real estate market.

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