It goes without saying that a lot of time goes into in-depth research before making the decision to buy any property, whether commercial or private. This seems to be the case because you’ll have checked the price, the neighborhood, the real estate laws in the area you are interested in buying as well as the background of the property. Without further ado, here are some of the things you’ll have to consider before buying a property that’s still rented:
Study The Real Estate Laws
Different states come with different real estate laws. For purchasing a property you’ll have to adhere to the rules that only apply to that particular region, which might be a little different from any other places. Therefore, your first order of business should be getting in touch with a real estate lawyer if you are to get any sound advice before making your purchase.
The Current Condition of the Property
If the property is brand new, it will naturally cost you more. But in some cases, buying a fixer-upper can, in the end, cost you even more than when you just bought a new property. Therefore, it would do you some good to get the property appraised so that you can make your calculations. This should be done before making a sound decision on whether you buy or move on to the next option.
The 1% Rule Should by All Means Apply
The 1% rule means that the property you’re intending to buy should at least earn you 1% of what it cost you to purchase it. Anything less than 1% is considered a bad investment unless the neighborhood of the area is highly likely to develop and therefore present you with the possibility of the rent increasing exponentially within a short period of time. And that’s exactly why you’ll be required to carry out thorough research. Per se, if you’re considering your options and exploring few properties for rent in Sydney, never hesitate to involve experts when you’re not sure about the localities.
Apart from carefully studying the real estate laws within the locality of the property you’re interested in buying, you should also check the property taxes to avoid getting caught flat footed. That said, always make sure you are buying properties that come with low taxes since that means more profits for you. As a matter of fact, checking the property tax should be one of the first things you ought to do.
Being a landlord means handling business. And with that in mind, you should be ready to handle unexpected issues such as breakage, replacements as well as catering for the janitor’s salary. That said, you will be required to list these things, add the total value so that in the end, you’ll be better equipped to handle the unexpected occurrences.
The Final Word
Truth be told, there are more than enough reasons for you to always keep an eye out on the property that you are intending on buying, especially if it’s still being rented. Additionally, you’ll be required to check on the tenants, assess the damage of the property (if any) so that in the end, you can estimate just how much you’ll spend in the facelift.
Finally, always remember to have an honest conversation with your prospective seller as well as remodeler. That way, the seller will be in a position to give you the real reason for selling the property while the remodeler, on the other hand, will give you a close estimation on how much it’ll take you to do the repairs so that you can come up with a working budget.