Wednesday, April 17

Explore Owner-Occupied Rental Property Investment Opportunities

Rental property investors review all options when purchasing an investment property. If they live on-site, the investor has better financing opportunities and won’t have to pay higher insurance premiums. Reviewing owner-occupied rental property investment opportunities helps the investor find a better venture. 

FHA Mortgages are Available for the Investment

FHA mortgages are available for any rental properties that are owner-occupied. The restrictions for the mortgages require the buyer to live in the property, and the property must be their primary residence. The mortgage program is not available for investors who will not live in the property. The borrower will need to get a conventional mortgage if they want to buy a second home or investment property. 

Renovation Allowance Could be Available with the Mortgage

The FHA 203(k) mortgage provides adequate funds to purchase the rental property and give the owner enough capital to complete renovations. The cap for the renovation allowance is $35,000. When buying a rental property, the buyer can complete renovations to make the property more appealing to tenants. Researching the current market shows the investor what features are more attractive to the tenants. For example, luxury features such as spa bathrooms increase the potential rental prices for the properties. 

The Owner Saves Money on Insurance

Owner-occupied rental properties save the owners money on their insurance premiums. They will only need one homeowner’s insurance policies, and the owner can add their landlord’s insurance together with their property coverage. Combining the insurance with an umbrella policy allows the rental property owner to pay lower premiums and get better discounts. Rental property owners can get help from NRIA and compare costs for insurance for the rental property. 

They Can Keep a Closer Eye on Tenants

Living in one of the units on the property allows the rental property owner to keep a closer eye on the tenants. If an altercation occurs on the property, the property owner can contact the police immediately. They will know if the tenants are violating the terms of their lease and avoid situations that could lead to lawsuits. The owner will find potential hazards on the property faster, too. This could lower the potential for personal injury claims and financial losses for the rental property owner. 

The Owner Has More Control over the Property

If the owner lives on-site, they can monitor any staff more proactively. They won’t have to wait for the property manager to notify them about issues. The property manager can visit the owner’s unit and tell them in-person. The owner won’t have to give any tenants prior notice of any inspections. They can come and go as they please without providing prior notice. This helps the owners find issues faster and mitigate risks. 

Owner-occupied rental properties give the investor a chance to get an FHA mortgage. The loans provide the owner with a chance to get a renovation allowance to pay for modifications to the property. These changes can increase the rental price and help the owner maximize their profits. Rental property buyers can discover more about these investments by contacting a real estate advisor now.