When is the Right Time to Buy a Second Rental Property?
What to “Know” About a Second Rental Income
Buying a second rental property is a big decision. A second rental income is a great way to increase your profits and provides an opportunity to diversify your rental portfolio. On the other hand, placing yourself in a bad financial position by taking on too much is not something that any landlord wants to do. So, when is it an excellent time to buy a second rental property?
Take a look at our list of what you need to “know” about buying a second rental property before you make the decision.
Know the numbers
Before venturing down the path to owning a second rental property, it is wise to know the numbers behind your first rental home. Give yourself 1-2 years of filling for taxes to better understand how much income is generated each month. Know the costs of running the property:
- Maintenance Costs
- Rental Rate
If you know your financial situation and feel comfortable, this might be the time to buy. Want to read more about profitable rental properties? Take a look at the following blogs:
- “5 Things to Look for in a Rental Property”
- “The Raleigh Housing Market: A Smart Investment in Your Future”
- “How to Decide on a Rental Rate”
Know how to be a good landlord
Give yourself time to better understand what it takes to keep a property running smoothly. There is a serious learning curve when it comes to being a landlord, so it is a good idea to give yourself time to know how to handle maintenance issues, repairs, rent collections procedures, and tenant problems. Trial and error are the best way to do this, but once you feel mentally and financially ready, take the leap to own more properties.
Know the market
Look into interest rates when thinking about buying a second rental property. Do your research and get the best deal on a second mortgage. Knowing the numbers is also linked to “knowing” when it is a good time to buy.
Know what you want
It is essential to know what type of rental property you want to invest in before moving forward. Do your research and dive deep into the targeted audience, real estate prices, and potential rental revenue. From identifying the type of property (condo, single-family home) to the rental location, you want to make sure to cover all of your bases and understand what you want before purchasing. Interested in learning more about your targeted market, take a look at:
Know you can ask for help
At Oak City Properties, we have been taking care of rental properties for years! Our full-service property management company will help you find and buy new rental properties to grow and diversify your portfolio. We will also market the property, locate prospective tenants, and show the home to qualified applicants. Once a tenant is placed in your rental property, we will: collect rent payments, assess and collect late payment fees, provide 24/7 maintenance, help with accounting/tax services, and deal with any court appearances in the event of an eviction.
Want to read more about property management services? Here are a few blogs that may interest you: