While millions of millennials may never be able to be homeowners, you’re much more fortunate.
If you’re thinking about buying a second home to rent out, you need to know that it’s the right decision for you.
There are numerous factors to take into account before you make an investment in another property.
Check out the top 5 factors to consider when buying a second home to rent in the blog post below. Let’s go!
- Short Term vs Long Term Rental
If you want to rent your second home, you need to decide whether you prefer a short-term rental or a long-term contract.
There are advantages to both. If you only have a short term rental, you could treat your second home as a vacation home.
That would allow you to benefit from the property during the summer. You can also charge your tenants more for a shorter stay.
And yet, you cannot guarantee that you’ll be able to ensure there is always an occupant in the property if you only allow short-term stays.
The long-term rental option would allow you to be more confident that you’re going to be able to receive a steady income from the property.
- Hands-On or Hands-Off Approach
Remember that you’re the landlord of the property. Any maintenance problems or repairs will require your time and money.
You could even do the repairs yourself. Or perhaps, you’ll need to hire a handyman to take care of everything for you.
You could also off-load the responsibility to a property manager. However, this will take a slice out of your rental money as well.
You need to determine whether you want to be hands-on or hands-off with your second home rental.
- Can You Really Afford It?
Before you make any rash decisions about buying a second home, you need to ensure that you can actually afford it.
Do you need to take out a second mortgage? Can you also afford the upkeep of another property?
You may realize that you won’t be able to make your money back on your investment with rent.
- Pick the Location Wisely
The location of the property can have a huge influence on the rent price you can charge your tenants.
If you make a poor choice about location, you could even struggle to fill your second home with a tenant.
- Know the Target Tenant
You need to do your homework with regard to getting the right tenant in your property.
If you want to appeal to students, then you need to ensure that the property is near to the college or university. You also may need to provide more furnishings.
However, if you’re targeting a young professional, you may need to attract them with a modern design.
Buying a Second Home to Rent
If you’re thinking of buying a second home to rent, there are many things you need to carefully consider.
You don’t want to make any mistakes with your investment. From ensuring it’s in a great location to working out your finances, you need to take into account our 5 factors.
If you want to discover more about real estate investments, check out the rest of our website.