How To Choose The Right Rental Property in Charlotte, NC
Talk To People
The first thing you should do is get to know your market by talking to local real estate investors. You can search for meetups, such as those on this BiggerPockets list, or search your area for real estate associations.
One of the things people underestimate is a network’s strength. Such connections will provide you with insight and advice specific to your region as well as property leads.
How Much Will You Need To Borrow?
It is then time to contact a lender to find out which loan and the interest rate you are going to qualify for. In other words, comprehend your borrowing position.
So, before you get excited about listing, you’ll know what your loan payment is going to be, rather than finding out later that the monthly payments are higher than you’d expect.
Think About The Ideal Renter Persona
Now it’s time to talk about who you’re going to rent to and what kind of neighborhood they’re going to be involved in. For instance, in the midst of an upscale suburban neighborhood, you don’t want a dingy studio. Find a property that suits the neighborhood’s character. It’s easier to find quality tenants by purchasing properties that are reasonable for the place.
Stay Away From Fixer-Uppers
If it’s cosmetic paint, tile, hardwood floors that’s just your effort, and when you start, it’s a great way to make money. However, having to invest in changes in piping or electric can be an absolute pit of money. We recommend “home hacking” if the houses you are looking at have bigger lease fees than you can handle. This is the tradition of living in the house for at least one year either by purchasing a duplex and staying in half or by buying a single-family home and having roommates which helps you to apply for non-investor interest rates and FHA mortgages.
Consider The Appreciation Of Your Rental Property
When it comes to housing, there are two kinds of value-appreciation: forced and market. This is an induced investment if you buy a house and make a lot of renovations to increase its worth. If the neighborhood improves and the value increases over time, the appreciation for the market is that.
As a new investor, you should not be focusing on the forced appreciation. In contrast, historical market appreciation is easy to investigate. As for what makes a good rental property before you start, look for one that can [generate] cash flow, no matter how it’s valued.
Estimate Your Rental Earnings
Once you have found an investment property that you like, it’s time to learn all you can about that.
If you are looking for your future rental home, it’s imperative to consider how many bedrooms you need. If you have kids they’re going to share a room? Do you often have guests? How many bedrooms are you in now? Is that enough or maybe you could use another bedroom? You might want an extra room to serve as a home office, a study room, or a hobby room. Take a few minutes to ponder what would work best for you now and in the future.
Likewise, take a couple of minutes to consider how many toilets would work best for you. If you are looking for hosting, you might want to have a reserved guest bathroom. It may also be exceptionally helpful to allow children to have their own bathroom separate from the visitors.
Above all, you should figure out how much income you can expect from the rental property to generate. If the property is already being rented out, ask the owner for his rental history and then compare those rates with others in the area to make sure that the owner is being honest.
If it was previously an owner-occupied property, Craigslist can be checked for rentals similar in size, amenities, and location. Learning how much they rent will give you a better idea of what you might be charging for.
Be on the lookout for listings that all “first month free” or “no credit check required” while you are on the site.