Hanging on to a property and renting it out can be a tremendously profitable endeavor – but should you try it?
Here’s what you need to know.
Should You Buy a Rental Property?
Flipping houses – the process of buying an affordable home, fixing it up and selling it for a profit – isn’t for everyone. It’s a bit too risky for some, although it can pay off to the tune of tens of thousands if done properly.
But buying a rental property might be a good choice.
If you’re going to be a landlord, here’s what to look for:
- Growing areas
- New jobs moving into the community
- Good roads and other services
- Schools that people want to send their children to
High-growth markets tend to be better for landlords. If you’re first starting out, sometimes other investors will advise you to target stable neighborhoods – and homes that are newer, because that means you’re (hopefully) on the hook for fewer repairs.
You might also need to hire a property manager. That way, your tenants won’t wake you up at 3 a.m. about emergencies – they’ll wake up your property manager instead. Just remember, though, that the average property manager charges between 7 and 12 percent of your monthly rent in fees – and some charge you even when the house isn’t rented. Some also tack on marketing fees for advertising your property to find tenants.
Your profits won’t be immediate if you rent out a house – they’ll come to you over time (each time your tenant pays rent, if you play your cards right and get a good enough deal on the house).
Are You Looking for a Hard Money Loan to Flip a House or Buy a Rental Property?
Paces Funding is a hard money lender offering hard money loans to purchase and renovate non-owner occupied residential and commercial properties throughout the Atlanta, Nashville, Florida, or the North and South Carolina metropolitan areas. Our application process for hard money loans is easy. Just fill out this very simple online form and you will be contacted shortly. Unlike other lenders, the window between applying and funding is very small. We have funded properties in as a little as one day, but typically funding hard money loans takes about 7 to 10 days.
Call us at 404-814-1644 or contact us online to find out whether you might qualify for this type of funding. In the meantime, check to ensure that you meet our loan criteria. Our loan amounts can be up to 65 percent of the after-repaired value of the collateral—and if you use the loan for renovation or construction, the loan amount can be based on the collateral’s improved value.