Planning to Buy a House to Rent? Here Are a Few Things You Should Know

When the time to sell a rental house comes, the homeowner may run into problems because they didn’t give much thought to buying a house that’s easy to rent when they bought the house. Rental houses don’t always start out that way either. Sellers sometimes move out and aren’t prepared to sell, so they convert the home into a rental house.

Here are a few things to consider if you’re looking to buy a home that’s easy to rent.

Location is key

This point may sound like a no-brainer, but it’s worth mentioning. If you purchase a home in an area where crime is rife, don’t be surprised when you have a hard time trying to find the kind of tenants you want. It’s generally easier to find good tenants in neighborhoods that people are likely to take pride in.

Disruptive noises from a nearby busy intersection, freeway overhead, or train track can also diminish the value of a home. In contrast, buyers prefer homes that are within easy commuting distance of employment hubs.

Give preference to neighborhoods in which most of the homes are owned rather than rented. Needless to say, prospective homeowners often don’t mind paying a premium to live in an area where other homeowners live. Avoid areas where most of the homes are rented unless it’s a high-demand area.

It’s usually easy to tell houses inhabited by owners from houses where tenants live because the former are typically well-maintained and in relatively good condition. Tenants frequently delay reporting maintenance problems out of fear that the owner may raise the rent due to repair costs.

Avoid repair/maintenance issues

Older homes, such as those constructed in the 50s, are usually better built than many modern homes. Nonetheless, newer homes usually need less repair work. A home constructed in the last 5-15 years might not need replacements for electrical systems, plumbing systems, roofing, HVAC systems, water heaters, and appliances. When you buy a modern home, you’re not likely to incur retrofitting costs.

Be wary of hidden costs

Hidden ownership costs can gnaw away at your profits. Before buying the home, confirm that it’s insurable. Find out how long the home will be vacant as you may need to buy vacant home insurance. Do your homework to uncover any fees you will likely incur. Have a professional look at the tax records.

Confirm that the previous owner obtained permits for all the updates, especially if you have reason to suspect that the previous owner remodeled the home without receiving the required permits. Verify the types of utilities for the home and the rates of those utilities. For example, a home may be all-electric, so heating will cost more.

Work with qualified real estate professionals

Buying a home to rent can be a complicated process, especially if you’re a first-time home buyer. You can easily be overwhelmed by the process of finding the right sellers and completing the paperwork. Take the stress out of the process and ensure you get the right home by working with a reputable house buyer – Your Trusted Home Buyer.