How to Find a Good Income Property

You’ve probably watched the show ‘Income Property’ on HGTV. If not, it’s a show where people buy homes, renovate them and usually end up paying the mortgage with the rental income. Sometimes, buyers even earn more than the mortgage payment. How great is that?! They’re able to build equity in a home and earn immediate income. That’s the kind of investment everyone should aspire to have. Investments are always best when they offer multiple ways to earn money.

bedroom-389254_640

Now, I’m not an expert in renovation but I have seen a few people create some awesome income properties. And based on the online research I’ve done, here is the pretty simple process of how to turn a regular property into an income property.

The Home’s Intended Use

Why do you want an income property? Will you use it as a place to live and then get renters to rent out bedrooms? Or do you want an income property with separate living quarters. That means a separate entry, kitchen, etc. for you and your tenants. Or do you want a property that’s purely bought as an investment? Think of your exact goal before buying a home. That’ll make sure you buy a home that’s already well-suited for your mission to be fulfilled.

Location, Location, Location

With physical real estate, location is the most important aspect to consider. Unless it’s a mobile home (a poor investment) it’s hard to move. So the location is something you secure once and you’re done. When buying an income property, it’s important to remember a few things:

Is the neighborhood going up in value?

Is the house close to a location renters will like?

Inspection

When getting any home, it’s smart to get an inspection. This will (hopefully) reveal any existing or potential future problems. Inspections are pretty low cost so it’s worth doing. Inspections cost an average of $300-$500.

Renovations

What kind of renovations may need to be done to get the most money out of the property as possible? Will you need to widen the driveway to accommodate more cars? Will you need to put in any egress windows in the basement? Will you need to update the bathrooms so they attract renters with more money? Some reno work will likely need to be done no matter what. Even in a contemporary home, there will likely be a few things you’d like to see changed.

Staging

Staging is a stage you don’t want to overlook. If a home feels welcoming and warm, people will be much faster to pull out their wallets. Make sure the rooms look beautiful. It doesn’t cost a lot extra to make a big impression. Consider finding a friend who enjoys interior design. Give them a budget and let them do the work for you. You can probably find someone who would love doing it – even for free.

Listing

Listing the property is an important step. In this step, you want to be put your best foot forward. Make sure the pictures are high quality. Make sure the listing is descriptive yet concise. Make sure the property gets as many eyeballs on it as possible. Use free resources like Craigslist. Consider reaching out to real estate agents as well. Spending more money upfront may get you a renter who will pay a lot month after month. An income property investment means investing in more than just the home.

Let the Money Pour In

The beautiful thing about income properties is that they can relatively passively generate income month after month. The value of the home can increase. You will get rental income each month. And you’ll be building equity in the home with each mortgage payment. An income property is pretty appealing don’t you think? Do you plan on getting one? What kind of property would you like?

Join our newsletter

If you like Critical Financial, subscribe and get our latest content via email.

Powered by ConvertKit

Share this post:

Recent Posts

One Comment

  1. Laurie says:

    There are a lot of things to consider when you are looking to purchase a property for investment purposes. One of the top things in my book would be that it be located in an in demand area. I agree, Iwould never purchase a home, for investment or personal use without an inspection – you don’t want to purchase a home that could be full of problems and have no clue. Inspections are always worth it. You have provided great tips, thanks for sharing!

Leave a Comment

*

May the 4th Be with You: Star Wars Swag on Amazon

May the 4th Be With You: Star Wars Day Swag

It began as the punniest holiday ever but quickly grew into an earnest (if somewhat random) celebration of the long-running (and still... more →
People count the money to buy a house in future success.

Avoiding Mortgage Scams: Don’t Fall for Unreasonable Promises

If it sounds too good to be true, it probably is. That’s sound advice for almost all aspects of life, including the search for... more →
Eat for free for a whole month via the meal kit companies discounts for new customers.

How To Get a Month of Free Food: 9 Meal Kit Companies Offering Discounts to New Customers

Play your cards right and you might be able to line up a month’s worth of free meals if you were to try out all nine of the meal... more →
Generate extra cashflow -- here are 97 ways.

96 Awesome Ways to Generate Extra Cashflow

Who doesn’t want more money nowadays? We’ve got you covered on that front. Here comes a long list of different ideas on... more →
Valentine's Day gifts that won't destroy your budget

Valentine’s Day Crafts Are Romantic Rescue from Crazy Inflation

Fall for the hype this week and you’re out an average of $143.56 for Valentine’s Day. Crafts and other do-it-yourself tactics... more →

Ultimate Guide to Bitcoin — FREE Ebook!

Have we got something for you: a free ebook about bitcoin! more →
Get a flu vaccine.

Why You Need To Get a Flu Vaccine Right Now

Flu vaccines aren’t just for the elderly  anymore. Here are 25 reasons you should go get vaccinated. more →
Financially successful

Acquire the Trait All Financially Successful People Have

Financially successful people tend to all have a lot of self-discipline. Improving your discipline in one area of your life often spills... more →

What’s the Best Free Recipe App?

The Apple Store and Google Play together offer more digital cookbooks than you probably have room for on your mobile device. So which... more →
New tax law might slow down housing market.

What Will the New Tax Law Do to the Housing Market?

The new tax law will have a profound impact on the housing market, although in ways that go beyond the deductibility of mortgage interest... more →

4 in 5 Households Will Get a Tax Cut in 2018

Four out of five U.S. households will get a tax cut as a result of the legislation that President Donald Trump signed into law today. more →
Will bitcoin reach $100,000?

When Will Bitcoin Reach $100,000?

Bitcoin has accelerated its pace of appreciation in recent months, and if the current levels between $15,000 and $19,000 make you itch... more →
The Dow Jones topped 24,000 -- now what?

The Dow Jones Crossed the 24,000 Threshold. Now What?

Stocks appear to be increasing in volatility, yet the markets closed on Monday, December 4 with the Dow Jones Industrial Average is... more →
Peer mortgage

Should You Get a Peer-to-Peer Mortgage?

If you can’t get approved for a home loan from a bank, you might want to look into applying for a peer-to-peer mortgage. more →
Investment gifting is awesome.

4 Things To Know Before You Donate an Investment

While donations of any kind are appreciated, gifting investments benefits both the giver and the receiver. Here are four key things... more →
Are you wondering: What's the Relationship Between the Stock Market and Federal Debt?

What’s the Relationship Between the Stock Market and Federal Debt?

Wouldn’t it be wonderful if gains in the stock market could actually reduce U.S. government indebtedness? If that were true,... more →

Debt.com Rescues Olympian Ryan Lochte With Blockbuster Financial Deal

The United States truly is a place of second chances. U.S. swimmer, Ryan Lochte, suffered a devastating upset in the Olympic games... more →