BUYING A RENTAL PRPERTY? WHAT YOU SHOULD KNOW....

So you want to buy a rental property in Land o Lakes and Wesley Chapel, FL? Good!

Real estate has historically been one of the best long-term investments and the best hedge against inflation. Now is the time to invest because the values of properties in Land o Lakes and Wesley Chapel have gone up  in the last few years sending a clear indication of future appreciation. 

Yearly gross income on rental property when you put down 25%, minimum could be as high as 50% of the original investment paying you back in 2 years.   Investing is always tricky, so here are a few recommendations to consider before buying a rental property.

1)      Buy in a desirable area of town.  

You want your demand (tenants) to stay higher than the supply of rentals in the area. 

2)      Buy in a neighborhood that will keep its value.  Neighborhoods with CDD fees will keep their value longer than those with a HOA only or no fees at all, because the CDD will see that the neighborhood and amenities are maintained well.  CDD fees are  collected with the taxes, so even if the neighboring homes go into foreclosure there will still be plenty of money for the maintenance.  Neighborhoods with a strong HOA are also good, if they have a track record of enforcing the deed restrictions, and if they have high reserves. 

3)      CDD and HOA fees, as well as taxes and insurance are tax deductible on rental property.  Some other deductions are property management, improvements, repairs, and depreciation.  Pretty much everything you spend on rental property is tax deductible.  Trips down here to maintain your property between tenants are tax deductible,.

4)      Properties with more amenities may command higher rent.  Find the market for rent prices in several neighborhoods you are interested in.

5)      Properties with included property maintenance are desirable, because that is one less thing you have to plan for.

   6)      Do not use a mortgage unless you have to.  When using a mortgage put as much money down as you can and make it a 15 or 10 year mortgage.  The interest is tax deductible, but the mortgage payment eats into your monthly net income.  When your mortgage is paid off, your income will increase.

   7)      401k money can be invested into rental property.  Consult your tax professional for guidance.

8)      Use a Realtor who knows the area and understands investment properties... and, very important... owns investment properties.  Also use a good property manager to manage your rental properties.  Good property managers are well worth their fees, because taking care of problems with rental properties is their expertise.  Dealing with tenants, finding vendors for repairs, finding new tenants, background checks, holding deposits, taking calls on weekends and holidays for you from tenants, and much more. They don’t just collect the rent.  You need them.

If you would like more information about purchasing rental property in Land o Lakes or Wesley Chapel, Text, Call or Email me directly at 813-714-9737 or Dee@DeeSmith.com  for Testimonials  visit www.DeeSmithSellsHomes.com