Buying a rental property which you will add as an investment property is a great way to build for your future and retirement. However, it is unwise to go out and purchase any home for sale that you like the best and stick a rental sign in the front yard. Here are some tips to help you be successful as you buy a home as a rental property.
Determine Your Tenant Market
As soon as you begin searching for a property to buy as a rental and getting to know the type of properties in the area, you need to find out what type of tenant market the area includes. The type of renters in your area will help you determine what type of property you should buy. For example, if the area is nearby a college or university, there will likely be a large number of students who are looking for housing. Outside of student housing, you can provide housing for students, which you can rent by the room to each student. In this situation you can look for a property with multiple rooms and a common or shared living space and kitchen.
Or, if you are looking to buy a rental property in an urban or city location, you will find a number of young professionals looking for housing, which you can fulfill by purchasing a condo or small unit property that does not have a yard and is low maintenance.
Apply With Housing Assistance Program
To help you rent your property you can take some steps to increase its rental potential. And a great way to do this is to make your property available with your local housing assistance office. There are several programs you can apply for as a landlord, such as housing vouchers and Section 8 rentals. To become a landlord for these rental options, the housing program pays you the rent or a portion of the rent that they cover and the tenant would pay the rest, depending on the tenant and how much assistance they qualify for.
The housing office can also help you set a rental rate that will correspond with their housing assistance program. So, for example, if you have been renting your house for $800 a month, once you apply and get accepted with housing assistance, you might find out your home's rental value is $950 with a few updates you will need to make to meet the housing's guidelines.