With the percentage of Americans who rent increasing, now is an excellent time to consider making rental property investment a significant part of your real estate portfolio. Purchasing a single-family home, a duplex, or even a four-plex and renting the property for a few years can bring in substantial monthly income in addition to the ROI that you will achieve when you eventually re-sell the property.
Rental property is the focus of ZINC Financial’s new Buy & Hold loan program, which gives investors the opportunity to purchase residential properties, rent them out, and then re-sell the homes after a period of 48 to 60 months. Investors who have taken advantage of this new program are enjoying the benefits of monthly cash flow and significant ROI over the course of their investment.
However, if you choose to purchase a rental property, there are a number of factors you’ll want to consider. Here are just a few things you’ll need to take into account before deciding whether or not a renting out your property is the right choice for you and your long-term financial goals:
Taxes – Rental properties can be great tax write-offs as you can claim certain deductions like the interest paid on mortgage loans, property repairs, and even the cost of insurance, but before you choose to invest, speak to your accountant to make sure you understand the full implications and benefits that your rental property will have on your yearly taxes. Additionally, you’ll want to be aware of tax procedures that you’ll need to follow. For example, you’re not supposed to claim your tenant’s security deposit as part of your income as it may be repaid to them at the end of their lease.
Property management – Will you be managing your tenants and finding renters on your own, or will you hire a property management company to handle this for you? What do you expect your maintenance costs on the property to be? And how will you handle situations like tenants who fail to pay rent on time? These are all costs you’ll want to consider before making the decision to purchase a rental property.
Location, location, location – Be sure to choose a property that will not only increase in value over the next few years but will also be likely to draw in tenants quickly. The last thing you want is for your property to sit vacant for long periods of time. One way you can help reduce your risk of vacancy is by purchasing a multi-unit residence like a duplex. That way, if one of the units is vacant for a while, your cash flow won’t disappear entirely.
These are just a few of the factors you’ll want to talk to your private money lender about before deciding which investment property is best for you. Contact ZINC Financial today to learn more about rental property investment or about the company’s cost-effective loan programs. Through the end of July, you can receive a Buy & Hold loan with reduced loan fees of just 1.0 point. In addition, if you secure your loan by June 30th, 2013, you could also receive an iPad 4. To learn more about the current incentives being offered by the company and the terms, email Amber Castro, Vice President of Business Development at amber.c@ZINCfinancial.net.