There’s no point lying; it’s near enough impossible to invest in property without substantial money behind you. Any enterprise requires down payments. But it’s hard to imagine an industry which deals in such large amounts of money so early on. Hence why many people never consider this as a possible career avenue. There are many rental questions you should ask before purchasing.
We’re not here to tell you-you can make this work without funds behind you. That’s not realistic. But, we are here to tell you that rental property may well be your key to the real estate world. However, you manage to buy your first property, renting it out could more than pay your way to the next step in the industry.
If that sounds like a good deal, you have one crucial question to ask yourself. Should you save up to buy outright, or take out a mortgage instead? In an ideal world, you would, of course, save up to buy. But, the reality is that could take a good few years. A mortgage, however, could see you jumping on the real estate bandwagon much sooner. Or, at least, it could if you do things right. Understandably, there are a few things you’d need to consider before this was a workable option. And, we’re going to look at 3 rental questions to consider now.
3 Rental Questions To Consider
How much rent could you get?
Before you approach a mortgage lender, you need to do market research. That means getting a rough idea of how large a mortgage you’d need, and also how much rent you could ask for said property. After all, each of these factors plays into how long it would take to repay your mortgage. And, that dictates how long it’d take to get fully established in the real estate world. Asking yourself how much you will make off the property is an important rental question to consider.
What type of mortgage should you choose?
It’s also crucial you consider your mortgage options before going ahead here. For instance, an adjustable rate mortgage wouldn’t suit you. With one of these, it’d be impossible to predict how long you’d be paying. Instead, something like a fixed-rate mortgage would allow you to at least judge when you’ll be able to clear that debt. And, given that timelines are a crucial part of business success, that could make a huge difference. It could also ensure you don’t end up paying over the odds.
Is the property in a good enough condition to pull a profit?
Is the condition of the property you’re buying going to allow you to profit? This is yet another of the rental questions you should be asking yourself. If it’s in a state of disrepair, there’s every chance you’ll need to pay for upgrades and fixes along the way. And, if you aren’t careful, they could get pretty pricey. Before you know, you’ll be spending all rental income on the property itself, and thus failing to make your mortgage payments. That’s bad news for obvious reasons. So, make sure that your property purchase is at least functional and unlikely to cost you too much in repairs. Then, and only then, you will rest easy that all your rent will contribute to clearing your debt.
As you can see, jumping into a property purchase isn’t the smart thing to do. First, ask yourself these 3 important rental questions. If the answers are positive and show you will make a profit, then the property will be beneficial. But, on the other hand, if the rental questions you ask are showing you that a profit may not be attainable, this may not be the best decision. Don’t jump in head first. Research your options and make a smart decision.