Jacksonville is not just a great place to live, it is also a fantastic place to vacation. Many homeowners here live in their homes year-round, but some also buy them as a rental, both for year-round and intermittent use. As well, some people just want to plant their money into a home, hoping to see that money grow. If you are considering buying an investment property, there are a few things you should take into consideration first.
Can you afford it?
While buying an investment property is meant to make you money, you are going to have to start with investing your own money first. Do you have an adequate down payment and are you able to make the monthly mortgage payments if you aren’t able to get renters? Be sure that you can afford the payments if the house has to sit empty for whatever reason. As well, many people buy investment properties that are fixer-uppers, in order to flip or to keep. Ensure you get a qualified inspector and contractors to look at the property before you decide to take the plunge. Your budgeted renovations could go way over and you need to consider if you can afford the extra costs. As well, the home will need continual maintenance, just as any other home does.
How much will I really make?
Nobody can predict what the real estate market will do, so the value of your home in the long-term is unknown. Generally speaking, home prices do increase over time. As for renting your home, you can’t expect to charge enough rent to cover all of your costs – mortgage, property taxes, maintenance – but you can expect to recover some of them, which will help pay off the principal on the home. There are also some tax advantages that you should be aware of.
Are you ready to deal with renters?
Renting your home is definitely a crap-shoot. While you can do all of the necessary background checks, you just don’t know what type of renter you’ll get. There is insurance that can cover bad renters, but be prepared for those who don’t pay the rent, destroy or damage the property or cause you other issues. Are you ready to be available for necessary repairs (or have hired someone to do it)? Are you prepared to do all of the background checks and interview renters? If your home is a vacation rental, have you researched companies like AirBnB, so you don’t have to do all of the work yourself?
Buying a home as an investment property could be a good idea if you’ve prepared yourself for the time and money you’ll need to spend up-front. If you need help finding your dream property, contact me!