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How to Buy the Home You’re Renting
Signing your first rental contract can be exciting and make the immediate future look a little brighter. It is not uncommon for renters to fall love with a property after the first year of renting one. Homes that are rented could be purchased if renters know how to buy houses used as rentals. Using these tips can prepare any renter for purchasing their first home.
How to Buy Rental Homes in 4 Steps
1. Get an Assessment of the Home
2. Make an Offer to the Property Owner
3. Decide if Cash or Financing is Required
4. Choose Closing Agent
Know the Value of a Rental
There two values that property owners consider when selling homes used as rentals. The first value is the fair market value of a home. This is usually determined by other homes in the neighborhood and the age of the property. This is usually what most real estate agents use to price homes in neighborhoods ready to be listed on the open market. The second value is the long-term income that will be lost upon sale of the property.
Simple county research can provide information about the first value of a property. This can be obtained from tax assessments, filed deeds of sale and other documents that list the current value of a property. This value must be determined before an offer is made to purchase property.
Make a Fair Offer
Knowing who actually owns the property is important during the offer phase. Some landlords do not own properties. Property managers typically are hired by property owners who could live out of state. Performing research that can uncover the original owner of a property is the starting point that is needed to make a fair offer.
Offers are best when put into written form. Explaining to the property owner that a current lease is in effect and then making an inquiry about the selling price of a property is important. Some property owners expect that tenants will renew leases year after year. Making an offer based on information collected in the research phase can be helpful.
Choose Cash or Financing
Not every person has a huge bank account that can be used to produce cash to purchase a rental home. It is more common for renters to have a small cash reserve that can be mixed with other financial resources. Cash offers can usually close real estate transactions faster due to the ease of paperwork involved.
If financing is selected, applications to receive funding must be prepared quickly. Some financial institutions work slowly during the financial approval process. This can slow down the pace of hoping to close on a property for sale quickly.
Select Closing Agent
If offers that are submitted to property owners are accepted, it a good idea to choose a closing agent as fast as possible. Some property owners can change their mind shortly after accepting an offer. Working swiftly to choose an attorney or other closing agent could ensure that property purchase can actually happen.
Agents generally charge a commission for their services. Reviews can be obtained from different companies online based on quality of performance and prices that are charged to close real estate transactions.