Tips When Buying Rental Property
Thinking about purchasing an investment property at the beach? Owning rental properties along the stunning Emerald Coast are very sound investments. But if this is your first investment purchase, there are still a few things you should consider.
Ready to be Hands-On? Being a landlord can require a variety of skills and if you are not yourself “handy” you will need a solid property manager and/or team of contractors to assist with its upkeep and maintenance.
Budget for the Unexpected Emergencies are bound to happen, so we recommend setting aside 25% of your rental’s income for unexpected repairs and maintenance.
Avoid Fixer-Uppers For your first rental, don’t choose one needing a ton of renovations. Seek a spot priced below or at market and needing only cosmetic, minor repairs.
Aim for the 10% Rule Calculate your rental’s annual cash flow and divide by the total cash you plan to invest. For example, if you earn $10,000 in cash flow and you invested $100,000 in cash, then your return would be 10%.
Invest in Landlord Insurance Protect your new investment and buy landlord insurance to cover property damage or liability should a renter injure themselves as a result of property maintenance issues.