Buying rental property is a substantial investment that requires careful planning, evaluation, and a strategic approach. Here’s a general guideline on how you could go about it:

Preliminary Steps

1. Set Objectives: Define your goals for acquiring rental property, such as cash flow, appreciation, tax benefits, or a combination of these.
2. Understand Landlord/Tenant Laws: Michigan has a guidebook for landlords and tenants. Click here.
3. Know Your Cash Availability or Arrange Financing: Should you want a mortgage, speak with lenders to pre-qualify for a mortgage, which will give you a good idea of how much you can afford.
4. Choose a Location: Research potential locations, considering factors like property values, rental demand, employment rates, and amenities.
5. Assemble Your Team: Find professionals who can assist you, such as a real estate agent experienced in rental properties, a mortgage broker, and a certified public accountant (CPA).

Evaluation

1. Market Research: Gather data on rent prices, occupancy rates, and tenant turnover in your desired area. This will help you project potential income.
2. Property Selection: Look for properties that meet your criteria in terms of size, condition, and price. Don’t forget to account for repair and renovation costs as well as potential vacancy months if repairs or renovations are required.
3. Financial Analysis: Evaluate potential returns. Factor in all costs, including mortgage, taxes, insurance, maintenance, potential vacancy and property management fees, if desired.
4. Physical Inspection: Once a property catches your eye, inspect it thoroughly. After you have an accepted purchase agreement you will want a qualified inspector to identify any issues that may affect its value or rentability.
5. Due Diligence: Review all property records, including zoning laws, past tax assessments, utility bills, and any restrictions on the property including local municipality permitting. Rental housing registration and certification laws and ordinances exist to help Michigan cities identify and regulate rental units to ensure safer and better quality housing for tenants and the surrounding community.

Contact us

Investing in rental property can be a rewarding but complex process. Tucker Benner Realty has sold several investment properties. Given our expertise in real estate, we’ll likely have a head start in understanding market trends, valuation techniques, and what makes a property desirable.

We can help you through the process. Call or text 231-730-8781 today!

Marilyn Tucker

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