{"id":2603,"date":"2017-07-17T10:00:38","date_gmt":"2017-07-17T15:00:38","guid":{"rendered":"https:\/\/riverbankfinance.com\/blog\/?p=2603"},"modified":"2017-07-16T21:21:14","modified_gmt":"2017-07-17T02:21:14","slug":"rental-property-quick-tips","status":"publish","type":"post","link":"https:\/\/riverbankfinance.com\/blog\/rental-property-quick-tips\/","title":{"rendered":"Rental Property Quick Tips"},"content":{"rendered":"

You may be interested in rental property as a way to earn extra income, but how should you go about it? <\/span><\/p>\n

Where to buy?<\/span><\/h1>\n

It\u2019s an old but fitting adage that there are three rules in real estate: location, location, and location. The same is also true for renting out property. You need a good location to attract renters, but there can be pros and cons, depending on where you invest. <\/span><\/p>\n

For example, if you buy near a university or college campus, chances are you won\u2019t have a problem renting out the place nine months out of the year. The summer months might leave your property vacant while students are no longer in classes.<\/span><\/p>\n

Other factors, such as how much your competition is charging for their properties, need to be considered. You could find a great deal on a duplex or a quad but find yourself unable to recoup your mortgage and upkeep costs if the area\u2019s average rental rate is too low. You have to think both as a renter and as a prospective tenant to have success. <\/span><\/p>\n

Crunch the Numbers<\/span><\/h1>\n

Investment properties, like rentals, require a minimum 20% down payment. The money can\u2019t come from large gifts, you\u2019ll need six months of payments reserved in savings, and you have to buy the property as an individual, not an LLC. <\/span><\/p>\n

Freddie Mac and Fannie Mae also have different rules if your mortgage goes through them. Freddie requires 2 years of documented renting experience on your tax returns in order to list any projected rent as income. Fannie Mae does not.<\/span><\/p>\n

In addition to all of this, a rental property mortgage also requires that you not have more than a 45% debt-to-income ratio.<\/p>\n

All of these factors are reason enough to sit down with a Riverbank Finance consultant to see if you qualify.<\/a>\u00a0Contact one of our mortgage officers at (800) 555-2098<\/span><\/p>\n

Property Management<\/span><\/h1>\n

Another factor that both lenders and owners need to take into account is how the property will be managed. Will it be all DIY? Will <\/span>you<\/span><\/i> handle finding tenants and hiring a handyman, or will you hire a management firm to do everything but pay the bills? All of these are factors you should consider <\/span>before<\/span><\/i> you enter a mortgage agreement. It will help you calculate what kind of return your investment will bring back and offer peace of mind to your lender as well. <\/span><\/p>\n

Plan for bad seasons while hoping for good ones<\/span><\/h1>\n

Let\u2019s face it, your property, at some point, will have vacancies. North Conway, New Hampshire is known for its skiing, mountain trails, and what they call \u201cleaf peeper\u201d season. This means their vacation rentals are full in summer, fall, and winter. Spring can be a vacant season for them for three months if a renter can\u2019t be attracted to come for other activities.<\/span><\/p>\n

It\u2019s also a good idea to have a rental agreement at least started, if not finalized, to show your lender. That way, on day one of owning the property, you can get to work renting it out with the proper paperwork already done. <\/span><\/p>\n

Lastly, every renter at some point in their career will experience a delinquent renter who refuses to make a payment. This is why it\u2019s a wise idea to research debt collection agencies to help you recoup the losses. <\/span><\/p>\n

 <\/p>\n

While rental properties do require a great deal of preparation, they can pay off for countless investors who are willing to put in the work.<\/span><\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

You may be interested in rental property as a way to earn extra income, but how should you go about it? Where to buy? It\u2019s an old but fitting adage that there are three rules in real estate: location, location, and location. The same is also true for renting out property. You need a good… Read more »<\/a><\/p>\n","protected":false},"author":12,"featured_media":2604,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[846,308,847],"tags":[8,849,848,276,851,850],"class_list":["post-2603","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investment","category-mortgage-tips","category-rentals","tag-down-payment","tag-dti","tag-investment","tag-rental","tag-renters","tag-vacancies"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/riverbankfinance.com\/blog\/wp-json\/wp\/v2\/posts\/2603","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/riverbankfinance.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/riverbankfinance.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/riverbankfinance.com\/blog\/wp-json\/wp\/v2\/users\/12"}],"replies":[{"embeddable":true,"href":"https:\/\/riverbankfinance.com\/blog\/wp-json\/wp\/v2\/comments?post=2603"}],"version-history":[{"count":1,"href":"https:\/\/riverbankfinance.com\/blog\/wp-json\/wp\/v2\/posts\/2603\/revisions"}],"predecessor-version":[{"id":2605,"href":"https:\/\/riverbankfinance.com\/blog\/wp-json\/wp\/v2\/posts\/2603\/revisions\/2605"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/riverbankfinance.com\/blog\/wp-json\/wp\/v2\/media\/2604"}],"wp:attachment":[{"href":"https:\/\/riverbankfinance.com\/blog\/wp-json\/wp\/v2\/media?parent=2603"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riverbankfinance.com\/blog\/wp-json\/wp\/v2\/categories?post=2603"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riverbankfinance.com\/blog\/wp-json\/wp\/v2\/tags?post=2603"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}