You might be considering purchasing a rental property to make some additional income. If this sounds like the perfect fit for you, then here are 4 tips to get you started on the right foot!
1. Pick A Good Property Management Company
This will ensure that you take care of everything for yourself so that you can enjoy your free time without having to worry about any hassles. A vacation property management will also take care of the legalities and paperwork, freeing up your time to enjoy life. Their job is to also handle emergencies so that you won’t have to. It’s always better to find a good property management company that will take care of everything for you so that you can enjoy your free time and not have to worry about any hassles. Long term, this is the easiest way to go!
2. Do Your Research
Research regulations in your area before deciding which type of property to purchase. Also, it’s important to consider the market conditions, vacancy rates, and future trends. Fill any gaps with longer-term, stable tenants and it’s unlikely that you will face serious vacancies.
3. Find People
Look for people who want to rent your properties so that they don’t sit empty. A vacation rental management company can help you find tenants, but be sure to conduct thorough background checks for each person. You need tenants who are good for the long term and will take care of the property. Before accepting tenants make sure that they fulfill the following conditions:
You’ll want to have proof that tenants are employed, so ask for their payslips which should show regular income. This will be an indication of the likelihood they’ll be able to afford your rental rates and also help if they default on rent payments.
Good Credit history
Tenants with a good credit score are more likely to be reliable. The credit score should be at least 680 and above.
No Eviction Record
Applicants with a clean eviction record will be acceptable; usually, this means that they have never been evicted and the only reason their last lease ended was that they chose to leave on their own accord.
4. Have A Contingency Plan
This is necessary if something happens with one of your properties that you never expected! Often, a vacation rental management company can assist you with any damage or emergencies that may arise. A contingency plan needs to include backup tenants, property insurance, and disaster protection.
Property insurance is probably the most important part of your contingency plan. Many professionals recommend purchasing rental property insurance for each of your properties to protect you from large, unexpected expenses. If there is a fire or some other natural disaster, the damaged property might suddenly cost more than you can afford!
As for disaster protection, you need to make sure that your property is part of the Federal Emergency Management Agency’s (FEMA) National Flood Insurance Program. You also can look into extra coverage for fire and wind protection, perils like hurricanes and tornadoes, sewage backup damage, earthquakes – even terrorism!
So, if you are considering purchasing a rental property to make some additional income, follow these 4 tips to get you started on the right foot! Pick a good property management company that will take care of everything for yourself so that you can enjoy your free time without having to worry about any hassles. Also, research regulations in your area before deciding which type of property to purchase. Find people who want to rent your properties so that they don’t sit empty and have a contingency plan for anything that might happen with one of your properties.