I'm currently in the process of analyzing my first rental property, and the numbers all look great so far. Only thing is, I'm a newbie and havent even purchased a home so I'm looking to fill in all the gaps and make sure I have every bit of information and experience I can learn from before I pull the trigger. Here are the details.
The home is in friendswood, tx. A very hot area from a few miles from where I grew up. Best school district in at least Houston of not the state, high population growth, very close to NASA, a mall and its coming in well below market (at least according to my agent).
My questions are:
1. How long does it take to set up insurance once I own the home, and how much does it cost?
2. Has anyone used renters warehouse before to rent the property out? What was your experience?
3. Are there any key questions I should ask the seller?
(I know to ask about potential major repairs, operating expenses, income)
4. When will I be responsible for the taxes? I think I'll be billed after year end for my fraction of the year owned times the total tax, that corrrect?
I appreciate any help greatly, and anything else I might be forgetting.
I accidently posted on the wrong forum! Darn!
I respectfully disagree with your assessment that Friendswood schools are the best in the state. By far, the best ratings go to Katy ISD. Not saying that Friendswood isn't good. It's just not the best.
Regarding your other questions:
1. Basic insurance can be set up in a day or two. But you'll also have to worry about flood insurance. I would need to know the address to determine what the flood risk is for that property. Friendswood is close to the coast, so you may also need windstorm coverage, which is available from the state.
2. They are my competitors so I can't answer that. I would love to talk to you about what my company can offer.
3. You won't ask anything of the seller. Any questions should go through your agent. If this is a property that has been a rental there are certain things you should ask for, like rent rolls, a copy of the lease, expenses, etc.
4. Taxes are pro-rated at closing. The tax due on 1/1/2017 are the 2016 taxes. So let's say you close on May 1. The seller will pay you for the taxes due between Jan 1 and Apr 30.
Let me know if I can be of any assistance.
Ran across this article a few days ago pertaining to the school district topic and thought I would share!
Running the numbers is the first step. I like the acronym TUMMI -- Taxes, Utilities, Maintenance, Mortgage and Insurance. Look at each category and understand your strategy for addressing each item. You are on the right track in asking about the tax obligation as each category will have different timing and cash flow impacts on the property. Good luck!
Thanks Gentlemen. While this deal didn't work out, I greatly appreciate the words of advice. @Fred Heller Thanks! When I do land my first property I will contact you about mgmt.
@Jake Wood Interesting article. I saw a news story about the top districts in Houston a couple years ago and it was Friendswood then Katy at the top. Either way a home in the 2nd best district sure isn't bad.