Buying a rental property is a great way to secure your financial future while learning the ropes of real estate investment. Many people purchase rental properties without researching the nuances of buying and managing real estate, which can result in significant financial losses. Luckily, you can learn from the mistakes of others and avoid common pitfalls by researching the fundamentals.

Enter the real estate market with confidence once you learn about the types of properties recommended for beginners, assess the risks associated with buying a rental property, and prepare strategies for getting the greatest return on your investment. Following a guide to investing in rental properties can help you get a strong start in real estate without having to learn through trial and error.

Finances

Understanding your own financial resources is the first step to making a smart real estate investment. Well-established investors with access to large amounts of capital often buy rental properties through all-cash offers in order to avoid mortgage interest and increase cash flow right away. If you’re just starting out, you probably don’t have the same financial resources, meaning you will need to take out a mortgage.

Taking out a home loan is a big responsibility, but by using rental income to cover mortgage payments and maintenance, you can start earning passive income while building equity. If you’re interested in buying your first rental, shop around at different banks to learn more about the full financial commitment. Consider reaching out to a financial advisor to help you set and achieve short- and long-term goals for your rentals.

Real Estate Market

Look at the short-term and long-term market trends in different areas to get an idea about when and where to invest. You’ll have to know more than just the average rent price in your area in order to choose a great location and timeline for your first investment. Performing a market analysis using different statistics can help you choose rental properties that are likely to earn you money. You should research a few key factors when scouting an area for their first rental property.

Rate of Appreciation

Real estate has intrinsic value, making it a commodity that is generally worth more as time goes on. Beginning investors should look for areas where the rate of appreciation is higher than the current national average, which fluctuates.

Choose an Investment Strategy

Once you understand the local market, identify your main goals for owning a rental property. Consider your financial goals in addition to other factors like your day-to-day involvement in property management and the type of property you want to own. Many first-time investors opt for traditional rentals, where they lease homes, condos, or apartment buildings for a year or more.

Research Legal Responsibilities

Whether you decide to manage the property yourself or hire someone else to handle the day-to-day needs of your renters, you ultimately have a legal responsibility for your rental property. You need to stay informed about building codes, understand your obligations as a landlord, and pay attention to the renter’s rights in your area to protect yourself and your investment. Seeking advice from seasoned investors, lawyers, financial advisers, and other experts along the way can help you skip the growing pains of buying your first rental property. By preparing for the risks associated with owning a rental property, you can help maximize your profits and get the best possible return on your investment.

For more information on purchasing rental properties or real estate in Sunset Beach area, contact our office.

 

Are you really ready to buy a home? Too often this question is asked by young homeowner hopefuls and in many cases, friends or family members, or the individuals own insecurities keep them from purchasing a home in their 20’s. As the next generation starts to reach adulthood, many people may be left wondering if they’re simply too young to purchase a home. Younger generations started preferring rentals over homeownership over the past 10 years, which created the notion that you may be too young to buy a home.

What Made Rentals Popular?

There are a few reasons that rentals started to become the more go-to option for younger individuals, 3 of the most popular reasons being:

• Rentals don’t require a down payment
• Rentals don’t require a long commitment
• Rentals handle home maintenance and repair for you

Related: Understanding Down Payment Gifts and Where they Come From

What’s the Flip Side?

These three reasons to rent vs. buy have created a false pretense that you may be too young to purchase a home however, this couldn’t be further from the truth. Many people have started to debunk these common misconceptions which is opening the eyes to many younger buyers, and in-turn, many younger buyers are becoming homeowners. Let’s debunk these common misconceptions:

While many real estate professionals feel that having at least a 20% down payment to purchase a home is the “best” option, it is important to know that it isn’t the only option. Many loans will only require a 3% down payment, and in some instances, you may even qualify for a special first-time home buyers’ loan where you’ll have to put 0% down, this opens a door for homeowners of all ages, regardless of how much you have in your savings account.

Related: Before House Hunting: A First-Time Buyer’s Checklist

For some, the thought of purchasing a house means that you plan to be there for the long haul, a minimum of 30 years, however, this is also a myth. Purchasing a home, even if you only plan to be there temporarily can be a great asset. You can either keep the home and use it as a rental property, generating income, or you can sell the home and use the proceeds on your next endeavor.

For many, especially those that have become accustomed to rentals, the idea of having to conduct your own home maintenance may be daunting. While you are indeed responsible for maintenance and repairs when owning your own home, with home warranties, a lot of the more difficult repairs may be covered.  Additionally, while you would have to pay for the service out of pocket, by setting a monthly home maintenance budget in case of maintenance or repair, you can hire professionals to conduct the needed work.

Ultimately, buying a home isn’t limited to anyone of a certain age, and now more than ever, the real estate market is starting to see a rise in millennial buyers and even generation Z buyers have entered the real estate pool.

If you’re currently searching for a new home, are ready to sell your home and need a qualified seller’s agent to assist you, or if you have any further questions regarding Carolina Real Estate, please feel free to contact our office at any time.

Schedule a Consultation

Additional Tips for Buyers

• Why Your Offer May Not Be Accepted
• Why is Multigenerational Living Becoming so Common?
• House Broke: The Common First Time Buyer Mistake
• Why Was my Offer Rejected?
• 10 Tips for Moving Across the Country
• Buying a Vacation Home

When it comes to moving to a new neighborhood you may find yourself easily excited as you are nervous, however what many buyers fail to understand is the amount of research that should be put into your neighborhood search vs. just the house search. We’ve all heard the saying that a good home can be ruined by a bad neighborhood and when it comes to purchasing a new home, your new neighborhood should reflect your dream home in the best way possible. So, what should you research and how?

Related: Understanding Down Payment Gifts and Where they Come From

Check Local Groups

It seems that anything and everything can be found online these days, including information about your new neighborhood. Look for local neighborhood groups, reviews, social events, etc. Many social media platforms will you understand what the current residents feel for the neighborhood, and it can give you a bird’s eye view of how the neighborhoods functions, noise complaints, traffic flows, etc. all with a few clicks of your mouse.

School Districts

While not true in all cases, in most, neighborhoods that are surrounded by highly rated school districts are generally more sought after, better kept, and in many cases offer additional amenities and events for families to enjoy. You’ll want to ensure that you do ample research if the home you love resides within a poorly rated school district as this may cause buyer’s remorse later down the line.

Check the Commute

Proximity to dining and shopping is indeed important, however, proximity to your workplace may be more vital. While it’s fairly easy to put your point A to point B into a map and estimate your commute based on miles traveled, this isn’t always the most accurate way to understand the neighborhoods traffic flow or commute times. Check traffic patterns, transit routes if needed, and get a true understanding of the commute times needed. Google is a great source to research traffic patterns. This will also help you understand the rough traffic flow both in and out of your neighborhood, a neighborhood “rush hour” if you will.

Related: Should I Buy in a Gated or Non-Gated Community?

Both surrounding and within Sunset Beach you’ll find some incredible neighborhoods, from existing homes to condos and even new construction homes, we would love to help you research and find the perfect neighborhood.

If you’re currently searching for a new home, are ready to sell your home and need a qualified seller’s agent to assist you, or if you have any further questions regarding Carolina Real Estate, please feel free to contact our office at any time.

It seems that more and more new construction homes are popping up across the nation and with so many master-planned communities that seem to boast true resort inspired living, it’s easy to see why new builds have become such a desirable option among buyers. Unlike building a custom home on your own, when choosing to purchase a lot within a new development, or a new phase of an existing development, nearly all the work is done for you.

Related: Thinking About a New Construction Home? Don’t Forget These 4 Things

The builders are already hired, plans are already approved by the city, etc. which means all you must do is select your lot, pick a few finishes, compare upgrade options, and then with a little patience, you can move into your new home. Seems simple, right? While in many instances it is indeed a painless experience, there are still a few different hiccups that you can easily run into which can delay the build, and ultimately, might push back your completion/move in date.

Weather Conditions

No matter how strict of a building schedule your home builder’s may have, unforeseen weather can throw a huge wrench in the timeline of your home’s completion. Even just one day of severe weather can set the crew back more than a week pending on rainfall, wind, etc. as it can either cause damages, or the equipment is unable to perform properly until the ground has fully dried and can withstand the weight of machinery and equipment. 

Supply Shortages

Unfortunately, we aren’t’ the only ones who might see supply shortages at the local home improvement stores and many builders may also run into shortages on building materials. Should this problem arise, your builders may be stuck waiting for the needed supplies to move forward with the build.

Human Error

We are all only human after all and mistakes do happen. Whether a small mistake, or large, pending on the severity of the error that is made, the construction crew may have to delay your move in date to properly fix and mistakes that were made.

Sloppy Paint Jobs

As one of the last finishing touches prior to moving in, oftentimes the construction grade paint job may be left a little sloppy. In this case you may require additional painting or touch ups prior to moving in, and while this won’t delay you drastically, you may have to wait a few extra days for the paint to dry prior to moving in.

Related: Exploring Sea Trail Plantation in Sunset Beach

All hiccups aside, it is important to remember that there are risks involved in all home purchases that could potentially delay your move in date. Whether due to one of the above-mentioned scenarios, or a problem found with an inspection of an existing home, the trick is to try and be aware of potential problems before they arise to help you plan accordingly.

If you’re currently searching for a new home, are ready to sell your home and need a qualified seller’s agent to assist you, or if you have any further questions regarding Carolina Real Estate, please feel free to contact our office at any time.

Schedule a Consultation

Additional Tips for Buyers

• Why Your Offer May Not Be Accepted
• Why is Multigenerational Living Becoming so Common?
• House Broke: The Common First Time Buyer Mistake
• Why Was my Offer Rejected?
• 10 Tips for Moving Across the Country
• Buying a Vacation Home