Henderson is a great place for buying rental property. If you have purchased a home before, there are really only a few differences in buying a rental property. When buying a rental property in Henderson, you will want to be sure that you have hired an experienced Henderson real estate agent who has also worked with rentals and can help you get your rental home on the market as soon as possible. Below is the process of buying a rental property in Henderson and some of the differences between investing in real estate and buying a personal residence in Henderson, Nevada.
Are you purchasing your investment property with cash? If so, you may be able to make lower offers than someone using financing because cash offers usually indicate a sure sale for sellers. Financed buyers often mean longer escrows and higher chances of falling out of escrow because they could not qualify for financing.
If you are not purchasing with cash, don’t worry! Many investors still use lenders for buying a rental property in Henderson. This may mean that you will have to make a few more offers on homes than a cash buyer, but if you hire the right real estate agent, you will still be able to find a Henderson real estate deal. If you are using financing for your purchase, you will usually need to save up at least a 20% down payment. The good news about this is that you won’t have to worry about PMI which can save you money on monthly payments. Banks require a higher down payment from investors because they often pose more of a risk than a buyer looking for a personal residence. Your real estate agent can also help you get connected with an experienced lender if you do not have a bank you trust yet.
The Las Vegas Valley offers a lot of different kinds of neighborhoods. If you were thinking of buying a rental property without an HOA, that shouldn’t be a problem! Many owners actually want an HOA with a low monthly payment as it offers an extra set of eyes if tenants get out of hand and aren’t taking care of your investment. Gated communities are also somewhat common in Henderson if you are worried about your home getting vandalized.
Not only does Henderson and Las Vegas offer a varied selection of neighborhood types, but also a range of homes from brand new to over 50 years old. You will also be able to find homes with fixer upper potential or that are just in need of a few cosmetic changes that will help you purchase the home for a lower price, spend a little money to get it ready to be rented, and not waste too much time before you get a tenant on the premises and paying rent. This can be a fun stage of the process of buying a rental property as you can find a great deal and your dreams of property investment are materializing!
As stated above, it will be beneficial if you are purchasing a home with cash, but sellers may still lean toward selling their home to an investor as they may seem more reliable of an option. Having an experienced Henderson real estate agent on your side will help you find great deals and know how much less you can offer for a home to still be realistic. This process can take a few tries before an offer gets accepted, but just be patient! The more patient you are the better chance you have of getting a great deal!
During this step in the process of buying a rental property in Henderson, you will want to make sure that your lender is on board and keeping up with the escrow timeline. Calling your lender at least once a week to make sure that they have everything they need from you, your agent, and your escrow company will ensure that the escrow process goes a little smoother. Before escrow can start you will have to make an earnest money deposit to show that you are serious in your offer. This is usually about 1%-3% of the home price and can be returned during certain timeframes of escrow.
A home inspection will help you determine what will need to be fixed in the home. Many investors do not wish to spend the money on an inspection and may try to do it themselves. However, this is money well spent as you may be missing an issue that will cost you thousands. During this step, you can back out of the purchase if you find something unsavory during the inspection. Backing out during due diligence, the period of time you have to inspect the property, will still get you your earnest money back.
If you are buying in an HOA community, you will have 5 days to reach the HOA package which includes how much you will be paying each month in dues and what the rules are in the neighborhood. You must read through this carefully as it is not uncommon for HOAs to limit or completely restrict rental properties within their communities. If this is the case you will be able to back out of purchasing the home and get your EMD back.
This is only if you are using financing. This is when the lender sends out an expert to make sure that the home you are purchasing is priced right and they are not lending you more money than what the home is worth. If the home appraiser values the home higher than what you’re buying it for, you’re getting a deal! Usually, it is best to keep this a secret from the seller so they won’t try to come back and get more money from the home. You have no legal obligation to share this information with the seller. If the appraiser feels as though the home is priced too high, you will either have to negotiate with the seller (you can use the appraisal breakdown to negotiate), come in with more money to make up the difference between what the bank is saying it is worth and what the seller will take from the home, or you can cancel escrow and get your EMD back.
As the end of escrow draws near you will be contacted by your escrow/title company to schedule an appointment to sign the final documents. If you are an out of state buyer and don’t want to fly back into town to sign the documents, just let your title company know and they can send you an approved list of notaries that you can choose from to sign your documents with. These notaries will cost an extra fee, but it will save you the hassle of traveling out if you don’t want to. Once you sign the final documents and the sellers also sign their documents, the title company will send the documents to the county to get the deed of the home transferred to your name and you will be the legal owner of the home.
As soon as you become the legal owner, you will want to get the home ready for renting it out. It is possible that you’ve purchased a home that is ready to go, in this case just let your property manager know that the home is ready and get them a copy of the keys. If you do have to make some changes before renting the home out, be sure to try to get those done as soon as possible. Every day or week that the house is vacant is more time that you’re losing time and money. If you are not fixing the home up yourself, you should have a schedule lined up of which company or contractor will be out to fix the issues with the home.
If you have found a great real estate agent that has helped you buy in the right area and can list the home for rent as soon as it closes, this process shouldn’t take very long! You want to hire a property manager in Henderson who will do an extensive background check on potential tenants to make sure your investment is in safe hands. Once they find a great choice they will let you know so you can approve Finally you’re at the point of the process of buying a rental property where you can earn passive income!
For an experienced real estate agent who has helped numerous clients purchase rental properties who also is a Henderson Property Manager, contact Nevada Desert Realty today at 702-509-1446 for a free consultation!