While it can be a lucrative method of real estate investing, there’s a lot to know before Investing Rent a house in Istanbul. This comprehensive guide will show you how to start investing in rental properties as a beginner. We’ll go over what it takes to invest in Rent a house in Istanbul, common mistakes to avoid, and things to know before you buy your first rental.
What is rental property?
A rental property is a residential or commercial property that’s leased or rented to a tenant over a set period of time. There are short-term rentals, like vacation rentals, and long-term ones, like those under a one-to-three-year lease.
Residential rental properties are often more accessible to beginners because they’re less expensive. Less money is required upfront and that often means that it’s easier to get financing. While there are exceptions, residential rental properties are also typically easier to manage. In most cases, managing one tenant is easier than managing twenty.
For these reasons, this comprehensive guide to investing in rental properties is focused on residential rentals.
Most investors buy a rental property with the goal of producing positive cash flow earning more income each month than they spend on expenses. Not every rental has a positive cash flow at first, but building up to one is a common goal of rental investing.
Owning a rental property is an active form of real estate investing and requires time, dedication, and involvement. Being a landlord isn’t for everyone. As you’ll see, there’s much work involved in identifying, analyzing, buying, and managing a quality rental property.
While there are options for outsourcing some of these active tasks, it’s rarely 100% passive, and there are always risks.
Do you think investing in a rental property might be a good idea for you? Keep reading to find out where to start and how to best prepare yourself for the project at hand.
Let’s take a look at the seven steps you’ll need to take to invest in rental property:
1. Determine where you want to invest
Beginning real estate investors often want to purchase rental properties in their backyard. That could mean in the same ZIP code as their current residence, the same city, or the same state. However, this may not be an option depending on the market you live in, nor is it always the best choice.
If you live in a neighborhood where property values are on the upper end of the market, rent may not support a positive cash-flowing rental property.
While it may be easier to manage a rental that’s only 10 minutes from your home instead of two states away, you can invest in any market. If you’re not going to invest in your backyard, take a high-level view at other markets, looking for areas that meet these criteria:
The demand for rental properties is high housing supply and vacancy rates are low.
Job growth is stable or growing. Economic expansion, job growth, and population growth are good indicators.
There are several free and paid resources to help you conduct market research on various areas of the country, including our own guide to the best places to buy rental property in 2020. Use them for information on the economic growth, housing demand, vacancy rates, average income, and average housing prices in different areas.
The current supply, and the viability of a potential investment. Some features require a paid upgrade.
Local Market Monitor is a paid site that provides market demographics, market investment ratings, and capitalization rates.
Department of Numbers is a free site with population, job, housing, and economic statistics.
2. Determine what you want to invest in
While single-family rental properties are one avenue of investing, they’re not the only option. You could own a duplex, triplex, quadplex, or something even larger (if you’re interested in commercial rentals). Decide if you’d like to own vacation rentals or long-term rental properties, too.
No matter what property type you choose, it’s essential to know what qualities of that property type are in demand. This includes the size of the unit or home, the number of bedrooms and bathrooms, or possible amenities such as a pool or fireplace.
Find out if there’s an oversaturation or undersupply of a specific property type. You might find, for example, that an area has too many one-bedrooms and few two-bedrooms available for rent. You can do this by looking at the current inventory on the market on real estate rental industry sites such as Zillow, HotPads, or ForRent.com. Talking to a local real estate agent is another great way to get information on a specific market.
3. Find potential rental properties to invest in
Once you’ve narrowed down your market and know your criteria, you can search for properties to invest in. There are several ways to find investment properties.
Search in the MLS or work with a Realtor
The most common way to identify potential investment properties is by searching the multiple listing service (MLS). Websites like Realtor.com and Zillow let you set up search parameters and alert you when a new listing matches those criteria.
You can also reach out to a real estate investment agent in the area and ask them to set up those same alerts. A quality realtor can be an excellent source for connections to banks, lending institutions, contractors, or suppliers that will come in handy when buying a rental property.
