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A number of people are taking advantage of the low interest rates and using an Albuquerque mortgage to buy their very first investment property. However, buying a home in order to rent it out takes a bit of knowledge. Here are some common mistakes for you to avoid when looking at that first home. Making A Decision Based On Emotion Instead Of Numbers Some people fall in love with the IDEA of being a passive landlord. They find a home in a good area that has stable values and a good history of rental rates. They then scoop up the first home that looks good and spend the next few years trying to break even on their investment. It is wiser to talk to a real estate agent with experience in rental properties. Explain to the agent what you are looking for and how much you can afford with your Albuquerque mortgage and then let the agent do some work. A good agent can show you properties that will meet your criteria and allow you the chance to make a profit. Allow More Than You Think For Maintenance And Repairs If you have owned a home for any length of time then you are aware that all homes need regular maintenance and a few repairs from time to time. Compound that fact with renters who know they don't own the home and you will find that your rental property has much more need for repairs than your primary home. Whatever amount you think you will need to handle the occasional repair and maintenance add at least 20% to it. This should give you a workable budget to help you through the lean times. Taking A Long Time For Initial Repairs And Renovations Many first time owners of rental properties buy a home with visions of grandeur. They want to repaint all the walls, recover the floors, add new appliances and make over the bathroom. However, all these things take time. Every day that your home is being repaired or modified is another day that it is not being rented out. It is better to buy the home with two plans (1) immediate and (2) long term. Get the home in good, move-in condition as quick as possible. You can handle the major renovations down the road once you have recovered some of your investment. Doing It All On Your Own Some people who are real handy will buy an investment property with the idea of making all the repairs on their own and managing the tenant screening, credit check, background check and collections. They feel that they will lose too much money by paying other people to help out. However, as discussed in the previous point, trying to do too much on your own takes too long. It is better to handle a few small items by yourself and hire professionals to handle the bigger tasks. It will make the whole process easier on you. Your goal as a real estate investor is to make a profit, not find a ton more work for you to do. Make sure you get approved for an Albuquerque mortgage first. Then, take some time to connect with a real estate agent and a property manager to help you over the hump of buying that first property.
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