In the current real estate market, now is the perfect time to learn how to purchase a rental property.
With South Florida’s increasing population, job growth, and limited inventory, it’s no secret that renting is the most viable housing option and will continue to be.
The first step to buying rental property as an investment is to enlist a Lang Realty agent who specializes in selling rental properties to help do a search for rental properties available for purchase. Your broker may advise you to pre-qualify, locking in an approved mortgage with a lender that specializes in mortgages for owners of rental properties, among them Debt Service Coverage Ratio or DSCR and Cash Flow. Those specialty mortgage loans factor in how much revenue the property is expected to generate, rather than the buyer’s credit history and ability to repay.
Tips for buying a rental property
Location, location, location. Like any real estate investment, check out how much renters are paying on average in Boca Raton, Delray Beach, Boynton Beach, West Palm Beach, Palm Beach Gardens, Jupiter, and the suburbs. Estimate how much you can reasonably charge in rent. And don’t forget to factor in state and federal property tax obligations. Make sure you’re familiar with tenant and landlord law in Florida so you’ll understand what’s required.
And lastly, before you identify a property you plan to rent out to a full- or part-time tenant, i.e. a snowbird for several months, or use as an Airbnb, that it’s doable. Many properties in this market are in homeowner and condo associations that have strict rules about how many units or homes can be rented, for how long, or at all.
