Before renting your investment home, you should know how much in return you will need to cover your mortgage loan. Expenses such as homeowners association fees, lawn cut services and yearly taxes are things to consider to make a calculation of the profit you are going to make out of your investment home.
Although rental properties are considered as a great investment, keep in mind that they also need a lot of money in many cases. Don’t be intimidated with complicated financing options because it is not that difficult to know the cost on a rental property. Mostly, banks require 20% down payment when purchasing a rental property. Moreover, you need to pay attention to repairs and carrying costs.
How much to rent your investment home?
If you don’t have it yet, and you want to purchase a home to rent it later, one of the most common problems that most buyers deal with is the money to buy the rental property. When granted, it can be expensive to rent an investment home since banks usually need 20% down, however; there are also other possible ways that you may consider.
If you are interested in purchasing a rental property, it could be difficult to spare yourself from spending twenty percent down payment. In fact, there are also some other banks that command 25% down payment. However, in the long run, if you make your calculations accurately, and you find a good deal in a home for sale, you will have an investment home for the future and your retirement money.
How much is needed for loan and renting costs on an investment home?
Although 20% down payment is usually required, the cost also depends on the values of properties in your area. You can buy houses that are around $100,000, which means that you have to pay $20,000 as your down payment. Apart from that, it is also important that you pay closing costs when you are purchasing a rental property. This includes insurance, interest, origination fees, recording fees, appraisals, tax certificates and many more. Experts suggest that you may assume closing costs to be at least three percent of the actual purchase price. However, you might also want to ask the seller to provide partial or all of the closing costs. Also, you may opt for an inspection, whenever necessary.
Now that you know how much to rent your investment home, you can come up with a better-informed decision. Also, our realtors are here to help you with any consultation you may need before purchasing a home. We have thousands of house listings available and houses for rent with different price ranges that will work your budget. Call us today at 877-531-1555 or click quote and we will get back to you shortly.