Finding a great rental property to buy isn't rocket science, but it shouldn't be taken lightly either. There are a lot of factors that can come together to create a snowball effect, which determines whether or not you make money on your investment. Here are a few tips to keep that snowball from running you over and emptying your wallet. There is a saying in real estate circles that goes: "You don't make money when you sell a home, you make money when you buy it." Since it is unlikely that you will find yourself owning a rental property without first buying it, this is a great mantra to adopt.
Buy below market value. This sounds easy, but it usually isn't. The days of having bunches of bank-owned homes to choose from are gone, and that means buyers need to be patient, well connected, and probably willing to get their hands dirty. Patience is a virtue that will come in handy not only while you wait for a good deal to hit the market, but also when you have trouble making a deal come together.
Buy in a desirable location. While you are being patient, use that time to check out neighborhoods that you might have overlooked. Midtown Bend is booming now, and Redmond has a great market for investment homes. Purposefully buying a rental property in a desirable location doesn't just improve the odds that it will rent quickly, it also improves the odds that it will stay rented. With Bend's current rental market this may seem like a non-issue, but plan for the future. Appreciation will be much more likely while you own it and a house in a great location will be easier to sell.
Buy a well-built house. Sometimes saving a few thousand dollars on the purchase price isn't worth the pain and suffering that could come later with a poorly built house. Find out who built the house you want to make an offer on. If the seller doesn't know, you should be able to find it in county records on a site like Deschutes County DIAL. Do you already have an opinion about the builder? If not, your real estate agent probably does or at least knows someone who does. If the builder passes the sniff test then put the house through the wringer and get a professional home inspection. Don't be cheap here, because there is too much money at stake to not know up front what issues the house might have.
There is no such thing as a "sure thing" in real estate, but if you follow these tips then you can say: 1) You bought at a discount, which means you made money on the house the day it became yours. 2) You bought in a desirable location, which makes it more likely the value of the property will go up between the time you bought it and the time you sell it. 3) You bought a home that was well built so you didn't have to spend every penny of cash flow on repairs.
Home Price Round-Up:
19979 Powers Rd., Bend, 97702
3 br, 2 ba, 1132 sf, 0.15-acre lot, built 1998
Listed by Keller Williams Realty C.O.
61710 Darla Place, Bend, 97702
4 br, 3.5 ba 2228 sf, 0.12-acre lot, built 2006
Listed by Bend Premier Real Estate
2499 NW Brickyard St., Bend, 97701
3 br, 2.5 ba, 2984 sf, 0.31-acre lot, built 2004
Listed by Preferred Residential Real Estate