Guest article provided by Suzie Wilson at happierhome.net
For those looking to grow their wealth via real estate, a common strategy is to buy a residential rental or vacation property. Landlording is a great way to earn income passively and protect your money in brick and mortar. Today, Xcellence Realty shares some handy tips and resources to help you make the most of your purchase.
Finding a Property
If you want to make a profit from a rental/vacation home, you’ll need to carry out plenty of prior research, looking into location, property condition, and market shifts.
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The best first step is to find a knowledgeable, trustworthy Realtor to help you find a profitable Tallahassee property.
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You can then carry out a neighborhood analysis, learning about seasonal traffic, appreciation rates, and local demographics.
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It’s also important to be certain that the house/apartment itself is in good working order.
Understanding Costs
Purchasing a rental/vacation property is less straightforward than buying your first home and you’ll want to understand any added expenses.
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Down payments are typically higher for properties that are not owner-occupied, usually ranging between 20-30%.
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Take the time to familiarize yourself with the various tax implications involved in renting out a property.
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Consider forming an LLC to protect your assets in case there’s ever litigation brought against you.
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Read about expenses and how repairs, travel, and office supplies are tax deductible.
Managing Your Property
Purchasing your property is one step but managing it involves a whole other set of skills and responsibilities.
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Home improvements will help you to draw in new guests and could represent good ROI.
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It’s always a good idea to keep local repair companies on standby as you’ll want to build a relationship with them.
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Hand out business cards to make it easier for tenants to reach you. As an added bonus, this may help with advertising as well, and there are plenty of online tools that can help you design business cards for free.
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Don’t skimp on basic utilities – good plumbing and working electricity are a priority for any landlord.
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Hand off the responsibility of managing your property to a capable property management company.
Vacation and rental properties can lead to huge profits but they also represent some risk. So take the process one step at a time and make sure you’ve carried out plenty of research before you commit.
At Xcellence Realty, our goal is not only to help you find the perfect home, but also to negotiate the best deal for you. Call (850)-524-2404.
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