4 Things To Consider When Investing in A Rental Property

So you are looking to invest in a piece of rental property and the thought of that supplemental income sounds like it could really help out.  You buy a house, rent it out and someone else pays your mortgage and make a little extra.  Then after 15buying a rental property in florida or 20 years you have a paid for rental property that your renters paid off for you over the years.  The house has appreciated nicely so now your investment is worth 20-30% more then what you originally paid!  That’s what most people think of when they consider buying a rental property, however, it is not always that simple. Here are three things you should consider when looking to invest in a rental property:

1. Location – This must be considered as you are deciding the caliber of houses and tenants you are considering to rent to.  Keep in mind anyone can be late or delinquent on rent but it will be important not to purchase a highly expensive home in a very middle class neighborhood, nine times out of ten you won’t be able to get the amount of rent you are looking for to cover the expenses.  Also consider how far is it from your residence?  If you are planning on managing the property yourself it may not be the best idea to be the landlord if you live in another city state because if you can’t drive by on any given afternoon you to check up on everything or get there quickly to fix minor problems you are going to have to pay someone to do these things which could eat away at your profits.

2. Investment potential – Of course you want to charge as much money as you can for rent each month to to cover the mortgage and make a decent profit.  This equation seems easy enough but you need to investigate on a few things before you go off buying something cheap and trying to rent it for a ton of money.  Is there any rental history?  What are the properties expenses for insurance and taxes?  What are the home’s previous values?  Has anything major been replaced or repaired?  Is there an HOA? If so what are the HOA fees and how involved do they get in the yard upkeep and house conditions?  These questions will help you get a better idea of what you are in for and if there will be enough money at the end of the month to make it worth your while.

3. Upkeep – Okay you understand that if you buy a house with an old roof you will have to replace it at some point but what if you look at it a little deeper.  Try to consider the ongoing maintenance the property will need.  Think about how the landscaping is set up, are there hundreds of feet of fancy shrubs, landscape lighting, gardens? Is there a pool? All of these things cost money on an ongoing basis to keep functioning properly and looking nice. And these expenses aren’t just limited to the exterior of the house, the inside of the house is a whole other story. Wood floors can be damaged easily, walls can be scuffed up, carpets can get stained. Of course you have deposits that will cover some of these things but have to be prepared for the extra work and the headaches these issues cause.

4. Unexpected expenses – Lastly, it is extremely important that you factor in the costs of unexpected expenses. You never know when the A/C will break or when a pipe will burst and when something like this does happen it can be very expensive. Many people just hope for the best and pray nothing like this will happen to their rental property but this is a poor strategy. You need to plan ahead and make sure you have money budgeted and stored away for any unexpected expenses. This means planning a little more carefully and maybe taking a little bit of the rent you collect each month and putting it into and emergency fund. Also, you can reduce the risk of something like this happening by doing routine maintenance on all important and expensive items. Doing this may cost a little money upfront but could end up saving you in the long run.

These are just a few things to keep in mind when considering making an investment in a rental property. However, don’t let these things scare you away from buying a rental property because real estate is one of the greatest investments you can make but you just need to do it wisely.  Hopefully, you can take this information we provided you and use it to better prepare yourself for a successful rental investment.

If you are looking to by property in Florida make sure to take a look at the MoveMap on www.MoversAtlas.com to get detailed information on the neighborhoods, communities, and cities you are looking to buy real estate in!

3 Good Reasons Why You Should Wait To Buy A Home

Most would agree, why would you rent if you could buy?! With interest rates as low as they are it should be a no brainer right?  Let’s just find a place and lock it in for the next 30 years… seems like a long time? That’s because it renting vs buying a homeis.  The following are reasons why you should NOT buy unless you know you are ready. You may not be thinking purchasing is all it’s cracked up to be after you read the top 3 reasons to rent.

1. Location, Location, Location – It may seem like you have found a good area that is safe and close to everything you enjoy on the weekends but what about your career?  Are you confident you are set up in a place that you will continue working for many years?  Since you like the area so much have you looked into the property tax rates and other local fees like insurance rates to own a home in the area?  What about your dream job or school you have considered for the past few years?  I will tell you that if you rent none of the previous items would be an issue, things like tax rates or your ability to be mobile would not be an issue.  I would suggest to really consider your future plans before you look to buy because getting out of a 30 year mortgage or selling a place you just bought is a huge hassle.

2. Affordability – If you are renting for $1200 a month you can afford a $1200 a month mortgage right?  Not exactly, there are a lot of costs that renting a place includes that you may not be aware of.   Just a small list of why being a homeowner may not be what you want right now; HOA fees, property taxes, mortgage fees, home insurance, yard maintenance and home maintenance.  These items may not seem terrible but when you add all of them up you could add another 50% to the mortgage costs.  Even if you feel like you could budget for it keep in mind some of these items are not announced and the leaky roof that could cost thousands of dollars as a home owner would cost you ZERO as a renter and the $1200 monthly payment stays that way.

4. Sensibility – If you decide the above reasons do not directly impact you or your decision to rent or buy, the last reason is sensibility.  Sensibility is more than just the numbers adding up it comes down to truly being able to make the purchase and be comfortable with your quality of life and standard of living.  Keep in mind you want at least 20% saved up for a down payment and ideally all the rest of your debt paid off, if you are in this boat then buying a home maybe your next step.  Sensibility also reflects the peace you have each month and the feeling that you aren’t stretched to pay your bills, save for retirement and to give when others are in need.

Not to make buying seem like a bad thing but if you are not ready than the purchase will end up being a curse more than a blessing.  Buying a home can also be one of the greatest investments you make in your life but if you make it at the wrong time it can be the biggest disaster.  I highly recommend purchasing a home but keep in mind it is still OKAY to rent for a period of transition, saving or relocating.  In the meantime do your research and continue to use tools like www.MoversAtlas.com when you look to rent or buy a new home.

How to Apply for Section 8 Housing

You may or may not be aware of the United States Housing Act of 1937 which requires states to subsidize housing for low-income families through the Department of Housing and Urban Development (HUD). HUD administers housing voucherssection 8 housing in florida for those who cannot afford to pay the full price of housing through the local Public Housing Authorities. The PHA has two options for vouchers; one is called tenant-based voucher and one is the project-based voucher. Under the tenant-based voucher, a voucher is provided for the tenant to use in any housing of their choice that offers financial assistance housing so it is valid for more than one area; if the tenant wishes to move, the voucher will carry over. The project-based voucher is valid only for the specific housing unit for which it has been assigned and if the tenant moves, they must reapply for financial assistance. So how exactly do you go about getting this help?

When it’s time to apply for Section 8 housing, be sure to find out where your nearest PHA office is. You can call them to ask about filling an application out online or in person. Either way, there are some things you will need in order to complete the paperwork. The first thing to consider is your eligibility which will be based on several factors. These include your annual gross income, your family size, your immigration status (section 8 is usually only available to US Citizens and persons with legal immigration status), and the median income of the area/city in which you are applying. Most applicants who are eligible for Section 8 are earning annually between 30% and 50% of their area’s median income figures.

Once you have assured yourself of your eligibility for the program, the next step is to collect the necessary paperwork to document your income and prove your need. This will require pay stubs, a letter from your current landlord, any documentation regarding current mortgage or rent payments, and any other paperwork you think will help you in preparing your application. An important thing to remember here is that there are different types of vouchers so you must pick the right one. There is a tenant voucher if you are planning on renting and there is also a property voucher if you simply need assistance paying a housing mortgage or a condominium payment. Note that Section 8 may also be able to help you purchase a small home for a cheaper price to allow you to make small monthly payments on it.

After you have gathered all of your information, determined your eligibility, and understood which voucher you are applying for, you simply call or visit your local PHA office and Voila! The hardest part of the whole process is the waiting game that follows. Because many families apply for Section 8 and there is not always enough housing to accommodate everyone on the list, your name will be placed on a waiting list depending on your need. Your waiting time will vary from city to city but hopefully before long, you will be able to live somewhat comfortably in your new home.

If you enjoyed reading this post you will find the main Mover’s Atlas site even more Interesting! There you can discover important information about what surrounds your current or future Florida home, give it a look: Mover’s Atlas.