808 Oahu Realtor (Ryan Riggins) License #RS-74740

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Tips for Buying Rentals

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Buying rental property can be an excellent decision and the better informed you are, the more likely you’ll have favorable results. The following suggestions can help you with your decisions.

rising homes.jpgReal estate is a long term investment affected by supply, demand and the economy. It isn’t an investment that is easily converted to cash. The costs to acquire and dispose of real estate are sizable and need to be spread over years to minimize their effects on the rate of return.

Invest in average price homes or slightly below average price to appeal to the broadest market not only when you are renting but later on when you sell it. The average price is relative to the market you are in and those specific prices.

Lower-priced homes will rent for more relative to higher-priced homes. There is an inverse relationship between rent as a percentage of the price. As the price increases, the rent as a percentage of the price decreases. For example, a $200,000 home might rent for $1,750 a month or 0.88% where a $400,000 home might only rent for $2,250 a month or 0.68%.

Choose predominantly owner-occupied neighborhoods because when you sell the home, it will appeal to a homeowner who will most likely pay a higher price for the home. Homes in predominantly tenant-occupied neighborhoods tend to sell to investors who pay lower prices and will not be emotionally involved with the purchase.

Purchase a property with the idea of selling it in mind. You may be able to get a property for a bargain price today but if it is due to a functional obsolescence like a bad floorplan or not enough bathrooms, that problem will still be there when you’re ready to sell the property. Identify what the problem is and what solutions are available. The property may rent fine in that condition but before you sell, it will need to be corrected.

Get the home inspected before you purchase it. Having the property checked out can save thousands in unanticipated expenses.

Consider getting a home warranty on your rental. The annual premium can limit the out of pocket expenses for repairs and maintenance.

Risk can be minimized by understanding the investment and what is involved in the acquisition, operation and disposition. For the typical homeowner, rental property is something that they can relate to because of the similar attributes of the home they live in.

Author: Ryan Riggins (RA)

Ryan started building his businesses at the age of 18, and he hasn't stopped since. He is a successful Real Estate Agent and Investor. He not only has rehabbed properties, but also holds properties as rentals. Ryan has made money by building his real estate investment business, learning on his own, and finding mentors willing to share their knowledge with him. Ryan is a true Entrepreneur. When Ryan Riggins found himself making a change to Real Estate in 2006, he looked back to his first open house at the age of seven with his Mentor/Broker and father John Riggins. In 2006 Ryan was living in Ohio, he realized it was time for a change. He packed up and moved to Port Lavaca, Texas. He literally rolled into town on his last tank of gas, and lived in a old burger joint, and knew he needed to come up with money to pay his Mortgage. Ryan teamed up with his father and started rehabbing Mobile Homes. Ryan kept working until he had put systems in place for all phases of the business. He has a system for finding properties, to finding contractors for remodeling Flipping and Renting. Ryan continues to works as a Realtor with his father John Riggins as his broker and Rehabbing homes, doing about 4 deals a month. This is his passion. He loves the adrenalin rush, and yes Rehabbing can be a little stressful. In fact, Ryan says: "You've got to have ice water running through your veins." In the course of Rehabbing, Ryan manages to beautify his properties, and the surrounding neighborhoods one step at a time. Ryan enjoys helping others Build Wealth through Real Estate. Whether it be the first time home buyer or the experienced investor or helping distressed home owners sell to avoid Foreclosure. To Ryan its all about building life long friendships.

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