Homes for Rent Condos Townhomes and Apartments
Offering homes for rent can be profitable for real estate investors. Although there can be pitfalls with rental properties, the potential for long-term passive income generally outweighs the risks. The most important aspect of purchasing homes for rental purposes is to determine the types of tenants you prefer and what style of homes for rent they are seeking.
Many types of people desire homes for rent. From college students to retirees, people want affordable rental homes in safe locations. Oftentimes, tenants are willing to pay higher rent for homes with easy access to employment, shopping and entertainment. They will also pay more for homes for rent that have extra amenities such as a swimming pool, fenced-in yard or access to golf, tennis or a community clubhouse.
Millions of Americans are pet owners and seek out homes for rent which are pet-friendly. Typically, tenants are willing to pay extra rent to accommodate their pets and landlords generally charge a higher deposit to cover potential damages.
With the barrage of foreclosures and personal bankruptcy filings, many people are looking for rental homes. Oftentimes, tenants can locate homes for rent at a lower monthly payment than they would pay for a mortgage. Although they can't take federal tax deductions for rent monies paid, they eliminate the stress of property maintenance, property taxes and homeowner's insurance.
Investors who own rental property can apply to become an approved landlord through the U.S. Housing and Urban Development (HUD) Section 8 program. This rent assistance program provides up to 70-percent of the monthly rent paid directly to the landlord. Currently, there are more applicants on HUD's waiting list than there are homes for rent. Therefore, becoming a Section 8 landlord offers investors guaranteed income and helps provide affordable housing to low-income families.
Investing in distressed properties, such as foreclosures and real estate owned (REO) homes, is a good way to build a real estate portfolio. Many foreclosed and REO homes can be purchased significantly under market value. With a bit of work, these low-priced homes can be transformed into affordable homes for rent.
In order to retain good tenants, it is imperative to be a good landlord. Real estate investors who do not have the time to maintain rental properties would be wise to hire a professional property management team. In addition to overseeing rental home maintenance, property managers can collect rent, locate new tenants, conduct credit and background checks, and ensure repairs are conducted in a timely fashion.