Today we’re going to go over how to buy a rental property in Silver Lake, CA. Buying rental properties in Silver Lake, CA can be an ideal way to help grow your personal wealth. However, our Silver Lake Real Estate Agents say as in most real estate investments, at times it is hard to know if you have found an exceptional deal, especially the first time getting your feet wet.
Here are a variety of things to look for to make sure that the rental you’ve spotted on Zillow is the correct investment for you.
Get The Best Location
Our Silver Lake Realtors say a “For Rent” sign will often pull more responses than an ad in Craigslist.com. If it is an ideal location, it will generally rent a lot quicker.
Run The Numbers
Our Silver Lake Real Estate Agents suggest that you get every last expense put into your budget calculations, and make sure you’ll have positive cash flow from the getgo, or at least break even if it’s in the ideal spot. Some things to put in your calculations are:
- Mortgage Payments
- Utilities & Don’t Forget Reserves
Our Silver Lake Realtors say the biggest mistake is to not budget enough for reasonable reserves.
As a general rule of thumb is at least $100 per small unit per month for remodeling, vacancies, and roof replacing need to be kept, and at least an average of $200 dollars per month must be budgeted for bigger units every month.
Look In Towns With High Home Prices
Fortunately for us, Silver Lake, CA is a magnet for a variety of new faces every week hoping to fulfill dreams of Hollywood stardom or who knows what else. Either way, what do people do when they can’t afford to buy?
Avoid Cedar-Shake Roofs and Wood-Sided Buildings
Our Silver Lake Sellers Agents suggest that you look beyond current expenses to how much maintenance the building will need. Low maintenance means fewer headaches and more profits for you. High maintenance buildings have many stories, stairs, elevators, flat roofs, basements. For the most part, big units have more maintenance than smaller units.
Additionally, very small units such as bachelor pads typically tend to have more vacancies so more time is spent tidying up and cleaning, painting and showing. Medium sized units in ideal locations have the least maintenance and the least vacancies which means, at the end of the month, more money in your pocket.
Ask To See The Rental History
Our Silver Lake Selles Agents suggest that you make sure you note how long residents are staying on average, and have they paid on time or do you have troublemakers in the house? Purchasing rental properties with below-market rents generally means you get to raise rents.
Raising rents means you instantly raise the value because rental property values are based on cash flow and income.
Find Out If Its Ok With Zoning And Fire Codes
Silver Lake Real Estate Agents highly suggest that you have it inspected by licensed & bonded professionals, and ask local officials if there are or have been any problems. You’d be brilliant to have the seller pay for a C.L.U.E. report too. If the property is less than 20 years old it’s somewhat unpredictable.
If you limit your search to newer buildings, you will be more likely to have building code and maintenance problems. Nonetheless, you should still have a physical inspection by a licensed property home inspector.
Consider “Owner/Manager That Is Out Of State”
These properties are often the best deals, mainly because it is hard to manage a property from a distance. An out of state seller is often more concerned with an immediate sale than a high price, but that’s just a rule of thumb.
Determine If The Neighborhood Is Stable Or Improving
Steady and stable is okay, but if you can purchase in a neighborhood that is improving, you’ll rent the units more easily, and therefore get automatic appreciation in value with time – Yahoo!
If you have any statistical or analytical questions about how to purchase a rental property in Silver Lake, CA contact me directly and it would be my pleasure to chat real estate investing with you. We do real estate seven days a week!