A Simple Guide to Buy a House That Is Easy to Rent

Deciding on the Purchase Price

Rent-to-own contracts must include the process and timeline for determining the cost of the house. When a contract of sale is signed, you and the individual selling it may sometimes agree on a purchase price that is more than the item's current market worth. In other cases, the price is set based on the property marketplace worth at the time the lease ends. A common desire among purchasers is to "lock in" the purchase price, particularly in areas where property values are rising.

Purchase a House in a Desirable Area

Always keep in mind the saying "Location, location, location." Avoid purchasing a property in a high-crime area and then wondering why renting out your house is so challenging. An attractive and well-liked neighbourhood with decent schools, a strong curb appeal, and indications that the residents take pleasure in their houses are often considered to be in a good location.

A house located next to a rail track, an airport, a busy junction, or a motorway will always be worth less. It is recommended to live close to transit that can take you to these job centers or within a short commute of centrally located places of employment.

Purchase in an Owner-Occupied Neighbourhood

A residential neighborhood with a high market value is usually one where homeowners live. In most cases, tenants will pay more to reside next to owners. In an area where the majority of the residents are homeowners, you may sometimes readily identify the rental property. Sadly, renters don't often keep the yards as well maintained as landowners do. The house may also exhibit evidence of neglected upkeep since sometimes renters fail to notify the owners of issues for fear that the expense of repairs would result in an increase in rent.

Purchase a House with at least two Bathrooms and Three Bedrooms

It is usually not difficult to rent a house with two bedrooms, but it is simpler to rent a property with three bedrooms. Additionally, you have the option to request a greater leasing fee.

A renter who requires three or more apartments will not hire a two-bedroom house, while a prospective tenant who only needs a two-bedroom house may be persuaded to pay a little bit more for an apartment with three bedrooms. Buildings with at least two bedrooms often have the highest resale value.

Purchase a Newer House

Older houses constructed before 1960 are often highly built from an investment standpoint, while modern homes need less upkeep. For instance, a house constructed in the last five to fifteen years may not need repairs or replacements for its appliances, heaters, air conditioning systems, roofing, plumbing, or electrical systems.

Retrofitting is usually not necessary for newer dwellings, unlike older ones. Certain code requirements, particularly those pertaining to water-saving or low-energy equipment, are grandfathered in until a repair is deemed essential. Remember that repairing a shake roof with an insulated shingle roof, for instance, may require lifting the underlayment and adding a fresh layer of OSB or plywood, which raises the project's cost.

Recognize the Unexpected Ownership Costs

You should be aware of what to expect before waiving contingencies related to purchasing a house. Potential revenues may be reduced by unstated ownership expenses. Find out whether renting out the house qualifies for insurance. Find out exactly if you can get empty dwelling coverage and how expensive that specific policy will be if the house is unoccupied for an extended period of time. Do you need flood or earthquake insurance? Check the tax statistics to see if there are any extra costs included in the tax rates that don't apply to the surrounding residences.

The Bottom Line!

Potential homeowners may move into a property immediately under a rent-to-own arrangement, giving them many years to concentrate on raising their credit ratings and/or accumulating money for their deposit before attempting to get a loan for the property.

Of course, as per the terms and conditions of the rent-to-own arrangement, certain requirements must be fulfilled. Before signing anything, even if an agent helps with the transaction, you should speak with an experienced real estate lawyer who can explain the terms of the agreement and your legal rights. If you want to purchase instead of rent, you may find it useful to research the most competitive mortgage rates in order to get a good deal on a house loan.