At Burnett Real Estate Team, we help a number of seasoned and first time buyers discover the property of their dreams. While most of our clients are looking for a home to live in, we assist with discovering investment properties as well.
Purchasing a home to rent out has always been a popular way to build wealth, diversify your investments, and of course, generate a recurring monthly income for you and your family. These are just some of the many reasons why our clients look to purchase an investment property.
Here’s a bit more detail on what to expect if you’re looking for an investment property in the Bentonville area.
Income generation is the number one reason to purchase an investment property, and Bentonville is an attractive area for that. According to Zillow, the median price for a rental in Bentonville is $1,350.00 a month.
There are many factors that may raise or lower what you can expect to earn every month, and of course you will have some expenses as well. Mortgage, taxes, and upkeep on the property will all have to be taken into account. Your realtor can help guide you towards a property that works best for your budget, and your expectations.
Finding the Perfect Tenant
Once you find that perfect investment property, the last thing you want to deal with as a potential new landlord are tenants that are unreliable—and even worse, tenants who don’t have enough of an income to pay for their rent.
It is not unheard of for landlords to request that tenants bring copies of their last two or three W2’s (or other proof of income) to meetings with their landlords. Additionally, running thorough background checks that include criminal history, credit history, rental history, employment verification, business and personal references, etc are a good idea. These background checks will let you know a little bit more about who is going to be moving into your new investment property. These are all common procedures for landlords. After all, it’s your property, remember?
There’s Different Rules
Operating as a landlord is different than owning a home for your own personal use. There are different laws and regulations that govern what you can or cannot do with your property while it is rented. Likewise, your tenants have their own rights and restrictions.
Your realtor can help educate you on the various rules, as well as point you in the right direction should you need further education or clarification.
Save Your Pennies
It’s important to note that many lenders will require you to have at least six months of cash in savings for every property you own. This means that you will need to have at least six months of mortgage payments saved up for not only your rental properties, but your primary residence as well.
Having money in reserve will help cover the cost of anything that goes wrong in your investment property—say a major flood that ruins your floors, or needing a new furnace. It will also help cover costs if your property sits unrented for a time.
Buying a home to rent out is an exciting prospect. It signals a significant investment in your future, so why not invest a little time in doing things the right way? If you’re looking to buy in the Bentonville area, Contact Us at Burnett Real Estate Team and let us show you why time invested with Burnett, is time well spent!