Housing news in Fountain Hills and the surrounding areas has not been uplifting to say the least, but there are some ways to cash in. The rental market is hot, demand is up and rents are rising. Foreclosures have turned former homeowners into renters, but also many other prospective buyers, are worried about losing their jobs or housing prices falling a lot further and are cautious about purchasing anything let alone real estate. As with many investments, the best time to buy is when most are selling or doing nothing. To figure out whether you can benefit by investing in rental property, here’s what you need to know.
Many factors make this a great time to invest. Mortgage rates are at a 40-year low, and homes in many areas are ultra-cheap. Meanwhile, demand for rentals has risen that, in turn, has enabled landlords to charge more. The typical investor today plans to hold for 10 years, according to a survey by the National Association of Realtors.cording to recent Census data. Make sure you plan on keeping your investment for a least that long.
CRUNCHING THE NUMBERS
Make sure you can cover your mortgage with your rental income. You’ll need money left over to cover HOA dues, repairs, property management. If you can buy a duplex or tri-plex, that is even better for generating a good profit margin, two- three rents will boost your income better than one and if one unit becomes vacant you still have income from the others.
DEALING WITH TENANTS
Are you up to dealing with repairs and tenants phone calls that may come at inconvenient times for you? You can always hire a handyman at $45 an hour to help with the grunt work. You can advertise on craigslist for potential tenants but most importantly do your homework and run credit and employment reports. You don’t want to end up with someone you may have to evict down the road for not paying their rent. On the other hand you can give up all your responsibility and hire a management company to take care of the all details, but that will cut into your profits.
MAKE YOUR RENTAL STAND OUT
It never hurts to add some finishing touches to make your place stand out from the rest. Even though you will not be living there, it will be someone’s home. Paint with warm neutral colors instead of white and consider adding ceiling fans and modern light fixtures. The kitchen is always a focal point so paint the cabinets and replace door handles if needed. Are the kitchen appliances sparkling clean? No one likes to cook in a dirty kitchen. Pay to have the place professionally cleaned, including carpets and washing the windows. Small changes can make a huge difference and you may be able to charge a higher price.
Searching for investment properties in Fountain Hills or the surrounding areas? Call/text me or email me for a quick response to your questions!