Purchasing a condo with the intent of putting it in the rental can be an excellent financial decision. However, when you buy a property with the intent of renting it, there are several factors you need to consider in order to guarantee your best chance of success.
Assessing Your Goals Before Buying
Before you buy real estate with the intent of renting it out, you need to determine your goals. For example, do you want to create a steady source of income for many years to come or are you more interested in selling the property for a profit later? If you’re looking for a property to sell for a profit later, you’re most likely best served by purchasing something that you can fix up to maximize your future profits. On the flipside, if you’re looking to get the condo rented right away, you should look for a place that is already in good shape. Don’t underestimate the time and money that might be involved in fixing up a condo to effectively compete for rentals like a newer property can.
Determining Your Expected Usage
When you get into the rental business, you will also need to decide how often you plan to use the condominium that you purchase. If you decide to visit Steamboat often, you most likely won’t be able to get your entire mortgage paid off by nightly rentals. Long term rentals however increase your ability to get all or the majority of your mortgage paid for. This is where assessing your goals before buying will once again play a key role in determining the actual usage you expect. Nightly rentals can be more lucrative than having long-term tenants, but might bring more wear to the unit as well. Another consideration is the possibility of a 1031 Exchange of this property in the future. If you’re considering a 1031 Exchange, there are limits to the amount of nights you’re allowed to live in your condo.
Picking the Right Location for Your Investment
Obviously, when you buy a condo with the intention of renting it out, you want to find property that is desirable. Otherwise, you will have a difficult time finding someone willing to rent it out either nightly or long term. Check into the management company of your prospective investment too. Find out any rules or restrictions on rentals and how they might help facilitate. Often you’ll find that a condo for sale has already been in the rental pool and historical income data can be determined. Condos that offer easy access to the slopes or provide conveniences such as shuttle service tend to produce a higher rental income than those that don’t. Other property amenities such as hot tubs add to the appeal as well.
All in all, resort towns like Steamboat offer a unique opportunity for earning rental income on investment properties. There are many opportunities to explore in this realm and making the right decision can often be quite profitable.
Assessing Your Goals Before Buying
Before you buy real estate with the intent of renting it out, you need to determine your goals. For example, do you want to create a steady source of income for many years to come or are you more interested in selling the property for a profit later? If you’re looking for a property to sell for a profit later, you’re most likely best served by purchasing something that you can fix up to maximize your future profits. On the flipside, if you’re looking to get the condo rented right away, you should look for a place that is already in good shape. Don’t underestimate the time and money that might be involved in fixing up a condo to effectively compete for rentals like a newer property can.
Determining Your Expected Usage
When you get into the rental business, you will also need to decide how often you plan to use the condominium that you purchase. If you decide to visit Steamboat often, you most likely won’t be able to get your entire mortgage paid off by nightly rentals. Long term rentals however increase your ability to get all or the majority of your mortgage paid for. This is where assessing your goals before buying will once again play a key role in determining the actual usage you expect. Nightly rentals can be more lucrative than having long-term tenants, but might bring more wear to the unit as well. Another consideration is the possibility of a 1031 Exchange of this property in the future. If you’re considering a 1031 Exchange, there are limits to the amount of nights you’re allowed to live in your condo.
Picking the Right Location for Your Investment
Obviously, when you buy a condo with the intention of renting it out, you want to find property that is desirable. Otherwise, you will have a difficult time finding someone willing to rent it out either nightly or long term. Check into the management company of your prospective investment too. Find out any rules or restrictions on rentals and how they might help facilitate. Often you’ll find that a condo for sale has already been in the rental pool and historical income data can be determined. Condos that offer easy access to the slopes or provide conveniences such as shuttle service tend to produce a higher rental income than those that don’t. Other property amenities such as hot tubs add to the appeal as well.
All in all, resort towns like Steamboat offer a unique opportunity for earning rental income on investment properties. There are many opportunities to explore in this realm and making the right decision can often be quite profitable.
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