Buying a condo to rent can make for an extremely rewarding investment. While this process is exciting, keep in mind that it is also a big endeavor.
It is critical first to understand the best approach to buying a rental property to equip yourself to make a wise and confident purchase. With this in mind, the Luxury Living team is here to help prepare you for buying and renting a condo.
Why People Buy Condos to Rent Them
Purchasing a condo to rent is an excellent opportunity to leverage additional monthly income, as well as tax benefits.
You will find yourself saving big money during tax season if you take advantage of all the deductions you are entitled to receive for expenses related to your condo rental. These deductions reduce the amount of money you are taxed, ultimately increasing your rental profits.
Many investors are also drawn to condos for rental purposes because these property types are often more affordable and easier to maintain than single-family homes, especially in a large city like Chicago.
Additionally, homeowners associations help alleviate stress for condo owners renting out their units. Since HOAs manage condo building, they are often responsible for handling many of the basic services. This means owners don’t have to sweat building repairs or managing garbage removal, a luxury that not all property owners have.
How to Approach Finding a Condo to Rent Out
Before narrowing down a condo to rent out, research is critical. Teaming up with a licensed broker can streamline the search process and ensure a suitable rental property.
We’ve compiled a list of key factors to consider when finding a condo to rent out:
- Find a desirable location: When it comes to any property purchase, location is everything. Finding a hot or up-and-coming neighborhood will increase the value of your property.
- Examine the HOA: Homeowners associations can impact your potential investment immensely. Before buying, make sure you feel comfortable with the HOA’s monthly dues, as well as their rules and regulations.
- Consider financing: Before purchasing a condo, you need to apply for a mortgage. Lenders will often review the condo board documents and building operations.
What to Know About Having Renters
Before leasing out your condo, you also need to understand what it is like dealing with renters.
Condo owners seeking to lease out their property need to thoroughly examine renter applications to ensure a wise choice in a tenant. Since renters will be residing in your property, you want to choose a responsible tenant who will likely take care of the unit and keep up with rent.
Hopefully, with more insight into the world of renting, you can feel more confident buying a condo to rent out. Get in touch with an experienced broker to begin the process today!