Today’s unsettled investment environment demands that you look beyond the stock market to secure your financial future. Many smart investors are turning to rental properties. But it isn’t as easy as buying that cute house down the street and waiting for the cash to start rolling in. You’ll need due diligence, lots of research and, last but not least, a substantial financial commitment and sweat equity in maintaining the property.
Are you hoping for immediate income from your rental or are you willing to break even, hoping to sell it for a tidy profit in a few years? Consider being a resident landlord by purchasing a multi-unit property and living in one apartment. The income from the other units will cover your mortgage payment, allowing you to live for “free.” But do you have the skill and mindset to do maintenance yourself? If you hire a property manager, plan on adding about five percent of gross income into your costs.
Consider what improvements you may want to make. A fixer-upper will cost less than a picture perfect property, but bringing a lesser property up to snuff can cost a pretty penny, too. Determine a competitive rental rate by visiting similar rentals. It goes without saying, but you’ll want to be sure that what income you make covers the cost of owning the property and then some. Finally, have a plan in place if your rental remains vacant for a few months.
The rental market in the Prescott area has become very strong over the last six months, leaving inventory significantly down from previous highs not so many months ago. As of the first week in July, the Prescott Area MLS had a total of 58 properties for rent/lease, with asking prices ranging from a low of $650 to a high of $10,000 a month. Below you will find the breakdown of what type of properties made up the 58 rent/leases offered.
| Property Type | As of July 10, 2014 | Property Type | As of July 10, 2014 |
| Site Built Single Family | 29
|
Manufactured Homes/Modular | 6
|
| Townhouses | 2
|
Patio Homes | 0
|
| Condominium | 12
|
1-4 Units property | 9
|
Ready to get started looking for just the right property to start your rental empire? Realty Executives of Northern Arizona has nine separate offices represented by 130 real estate professionals. Count on them to provide the information you need to find a fine rental property. Check the current listings at www.realtyexecutivesaz.com. QCBN
By Don Bonnell
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