Have you ever thought about buying an investment property on your own? If you have, it’s important to understand the ins and outs of investment properties. There are a few main factors to consider before your purchase:
1. Location
2. Down Payment
3. Insurance
Location: The neighborhood should positively impact your home’s value and attract tenants or tourists. It’s crucial that your property will be able to generate enough income to comfortably cover your expenses for the property, such as your mortgage, property taxes, repairs or HOA fees.
Down Payment: Investment properties require a higher down payment if they are not owner-occupied. Typically, it is a minimum of 20% down, but it doesn’t hurt to put more down if you are able.
Insurance: Rental property or landlord insurance covers property damage, protects again liability and lost rental income. A business owner’s policy is common with vacation rentals, since you’re basically operating a mini hotel.
| Vacation Rentals/Airbnb | Long-term Rentals |
| PROS | PROS |
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| CONS | CONS |
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Are you using Airbnb or VRBO to rent your investment home? Vacation rental regulations vary by city and town, so make sure you get familiar with your local laws before listing your property on any site.
We would also be happy to assist you with long term rentals of your home or condo such as 6-month tenancies or annual tenancies.