What You Should Know About an Owner-Occupied Rental Properties

Purchasing a rental property presents buyers with an excellent opportunity to generate residual income. Owner-occupied rentals place the owner on-site and give them a home within the property. Reviewing details about the opportunity helps buyer decide if it is right for them.

Qualifying for an FHA Mortgage

Applicants with credit scores of at least 580 could qualify for an FHA mortgage and buy a property. If they want to purchase a rental property, the terms and conditions of the FHA mortgage contract must be followed. This means the borrower must live in the property. With owner-occupied rentals, the buyer could choose a myriad of properties such as apartments, condos, townhouses, and duplexes. As long as they live in one of the units, the property classifies as owner-occupied.

Finding the Best Property

Buyers looking for the perfect rental property get help from their real estate agent. Once they have financing through a lender, the individual has a better chance of working well with an agent. Since they will live in the rental property, it is necessary to find a rental property with a unit that accommodates the buyer and their family. Examining the property for the right features helps the individual find the right space to rent and the perfect home for their family. Reviewing all rental properties with a checklist helps the buyer get everything they need and purchase a property with excellent earning potential.

Generating Residual Income by Renting the Property

Residual income is the primary purpose for buying a rental home, and the seller must provide records for current tenants and all earnings for the property. The buyer needs to know if there are any existing tenants that have an active lease. When buying a rental property, the sales contract may require the buyer to honor existing leases and accept the current rental price locked in by the lease. Buyers can review strategies for financing an owner-occupied rental property by visiting twitter.com/dustindimisa right now.

Eliminating the Need for Property Management

Since the owner will live on the property, they won’t need to hire a company for property management. The owner can act as a property manager and landlord for the tenants. In fact, they could save money by completing these tasks themselves and getting contracts with service providers such as electricians, plumbers, and HVAC providers.

Cutting Insurance Costs

Homeowner’s insurance policies protect the property since the owner will live in the rental property. The owner will need landlord insurance to cover liabilities and risks to the tenants and visitors. Financial advisors recommend including renter’s insurance in the leases to protect the property if the tenant causes damage. Adding a clause in the lease for pets requires the tenant to add their pets in their insurance coverage.

Rental property presents buyers with a lucrative business venture if they conduct their research properly. When buyers want to live on the property, they could get FHA financing and acquire renovation allowances if they wish. Buyers can learn more about financing owner-occupied rental properties by contacting a lender now.

Carlos Wagner