Think About THIS Before Buying a St. Louis Rental Property
When a great St. Louis rental property comes across your desk, it may be your first instinct to buy it right away, but that’s not always a good thing. There are several things you need to think about before diving head first into a new St. Louis rental property.
If you’re considering a purchase, first consider the following before buying a St. Louis rental property.
What is your financing?
Your first thought should always be about financing the project. Buying a St. Louis rental property is much different than buying a regular owner-occupied home. The down payment will need to be much bigger, usually between 20 and 30 percent of the price, and you’ll need to have a really high credit score, usually at least 700 or 720. The money needed for the down payment will also need to be sitting in your bank account for at least 60 days.
Your financing should always be your primary concern, so think about what you can really afford and how you’re going to afford it before making an offer.
How will the property be managed?
A lot of investors forget to think about what happens after they own the St. Louis rental property. Renters don’t just line up and ask to rent the property. You need to market the property, and when you have tenants, then you need to keep up with al maintenance and repair requests. Depending on the property, this could mean spending a lot of time fixing up properties.
You can always hire a property manager, which will usually cost about 10 percent of your rent. Remember to calculate this into your profits before buying the property.
Will you have an attorney to help you?
A good real estate attorney can be a vital member of your team. An attorney can help you broker a good deal with a seller. When you draft a lease, an attorney can look it over and make sure it fits with the laws of your St. Louis area. Having an attorney up front can save you from a lot of headaches down the road, so make sure you have a good one.
Will you have an insurance agent?
Insurance protects your St. Louis rental property from all types of disasters, and it can save you should something happen with your tenants, such as a fire. To get the best coverage, you should work closely with one insurance agent who knows your properties. He or she will be able to help you get the best prices on your monthly premiums.
What sort of maintenance help will you have?
When you have a St. Louis rental property, keeping up with maintenance should be a primary concern. You’ll need a handy person on staff to fix problems and do routine maintenance jobs as they come up. This takes a lot of trust, so you want to make sure you choose the right candidate with the skill types.