If you’re thinking of buying your first investment property in Park City, congratulations! Owning rental property can generate income and build wealth. However, it’s not a decision that should be made lightly. There are several factors to consider before taking the plunge, from choosing the best location to determining whether you prefer to manage the property yourself or hire a professional.
1. Do Your Homework
Before you start shopping for an investment property, it’s essential to do your research. Decide what type of property would be the best fit for your needs and budget. Once you have determined your property type, you can begin scoping out locations.
2. Look for a Property With Potential
When you’re buying an investment property, you want to look for one that has the potential to generate a good return on your investment. Look for properties in desirable locations in need of some TLC. With a little bit of work, you can turn these into profitable rentals.
3. Consider Hiring a Property Manager
If you’re not interested in managing the property yourself, you may want to consider hiring an individual property manager. They can handle all the day-to-day tasks of being a landlord, from finding tenants and collecting rent to maintaining the property.
4. Get Pre-approved for a Loan
Before you start shopping for an investment property, it’s a good idea to get pre-approved for a loan. This will give you a better idea of how much money you can borrow and what your monthly payments will be.
5. Protect Your Efforts and Yourself
Once you’ve found the perfect property in Park City and are ready to close the deal, make sure you’re taking steps to protect yourself and your investment. One way to do this is by forming a limited liability company (LLC). This will help shield your personal assets from any legal troubles that may arise down the road. There are a couple of different ways you can form a Utah LLC. First, you could employ a lawyer to help you with the process. Or, you could use a formation service, which is significantly less expensive, so more and more business owners are choosing to go this route.
6. Get a Home Warranty
Speaking of protecting yourself, while you are researching property, it is important to research home warranties. A home warranty is a service contract that covers the repair or replacement of major systems and appliances that break down due to normal wear and tear. They are usually offered by the builder or developer of a new home but can also be purchased for older homes.
Before choosing a home warranty, be sure to identify any concerning factors in the home inspection record. Additionally, many appliances come with pre-existing coverage, so determine what falls under these warranties and for how long. Researching online is the key to determining the value.
Succeeding as a Property Owner
When it comes to buying your first investment property, you need to make sure you choose a good location, recruit legal help, and make sure your finances are protected. But if you diligently do your homework, you can be a successful property owner. For a jump-start on your location research in Park City, check out Aprés Realty in Park City’s directory.