I am looking at purchasing my first rental unit, more specifically a duplex or triplex. What types of questions should i be looking to ask? Basically all I understand is that I want to make sure I stick to the 2% rule. But what other things should I be asking before buying? Rental occupany %?
Educate your self on tenant laws for your state and get a good grasp on what's in a residential lease. along with other addendum's you will need for your particular property.
Taxes. Utilities, any pending or open permits, is it zoned properly, when was last inspection by the city for rental license renewal done. Is rental license current. Age of roof,siding, furnace, water heater, and if there is any lead paint might pay to do your own testing for that., any asbestos in furnace area or on siding or in floor tiles? What are lot lines, and parking restrictions for area and building, off street parking regulations !!it's important !! Cable and internet current providers, get list of any major repairs done by any vendor for past 2 years. Copy of rent roll for past 2 years, Copy of expenses for building for past 2 years included insurance and utilities. Get any vendor contracts for service currently used figured out how they will roll over or how to be discontinued.
Copy of leases and move outs for past 2 years including security deposits, if you go into contract. otherwise you want records showing rent roll.
Occupancy per unit is basically per city license regulations so make sure you know what that is.
Is exit legal for basement? Are you permitted to have washer and dryer in basement for tenant use if you don't have more than 1 exit, do you need another emergency egress to permit tenants to use basement.
And example of similar rentals in area that are close to what your planning on buying. You'll need to shop and compare either by drive by or craigslist ad rental positing to find out what competition is actually getting for rentals.
Good luck it's a lot of work.
Way to go Deanna! You told him! I couldn't have said it better myself; buying and managing properties isn't for the ignorant or lazy. You've got a lot of work to do, so get to it!
Most of this I see relevant to any house buying scenario. I purchased my first single family home 3 years ago. I can see where simple items like roof and AC are must know, but more specific items tailored to houses that are not going to be owner occupied. The basement I am lucky I can avoid all together as the house is in Florida.
Will definitely need to look into rental license and inspection date. No house would I ever purchase without a thorough inspection.
Thanks for the tips!
It's just about like running a hotel, your always on call , you have to have emergency back up in place for just about everything. And the money isn't always there when you expect it to be.
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