Anyone who has been involved with owning real estate over the past several years is painfully aware of the recent decline in home prices. While homeowners may be unhappy that their home is worth far less now than five years ago, for those who are looking to make a purchase, todays market is a blessing. For the first time home buyer, buying real estate can be a better financial move today than it was five or ten years ago.
It also might be a good time to think about buying an investment property. For those with the stomach to be a landlord (think late rent checks, weekend repair calls) then owning a rental home could possibly be a smart, but big investment. Lenders will want at least a 30-percent down payment and will have strict underwriting guidelines in order to extend a loan for an investment property purchase. The important numbers to calculate are whether the rent will cover the mortgage, non-homestead real estate taxes, landlords insurance, and maintain a reasonable fund for repairs and maintenance. Once those numbers work, the only job left is http://www.zillow.com/ determining whats available for purchase.
The rules for buying a rental property are far different than for looking for buying personal home. It is always important before every business decision to do due diligence research!
To find out what the demand for rental properties is in any area (all real estate markets are local) spend a few minutes every other day shopping for a home to rent; read Craigslist ads and the classifieds of coco palms the local newspaper. If properties come and go relatively quickly, thats a sign that the market demand is healthy. Also note what other landlords are asking for rent. Additionally, call local apartment complexes to see what the wait time is for a unit; if theres a waiting list, thats another sign that the rental market is strong. Some Realtors may have good market insight, and having a good Realtor is a plus. However, a smart investor knows nothing beats doing the necessary homework to develop local market awareness.