What to Look For When You Purchase Investment Property

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If you're thinking of buying a house and renting it out, then you'll want to use this checklist before you get started.

What to do when you're purchasing a rental property | www.deductingtherightway.com

It's best to create a custom task list to keep you on track — whether you're buying your first investment property, buying an investment property as your first home, or adding to an expanding rental portfolio.

Rental Property Checklist

You need to know upfront the issues that may become your responsibility so you can submit a final offer that makes financial sense.

City and town citations
Confirm there are no open violations with local municipalities which can range from unpaid garbage tickets to a citation for peeling paint. Correcting these issues cost money, so include them in the initial capital investment that you'll be making into the rental property.

TIP: Learn how to deduct your initial costs by reading our book Deducting The Right Way: Untangling Small Business Accounting & Taxes.

Rental registration
Many cities require you to register your rental property and pay an annual fee. The rules vary for owner-occupied and non-owner-occupied properties and the number of units inside the building. Call to find out what they require from landlords before renting to tenants. 

TIP: If you're operating short-term rentals, you must also call to find out about sales tax, occupancy/bed tax, and other applicable tax receipts.

Make sure there are no unpaid balances or utility violations for the water, electric and heat. If the meters are missing or turned off, find out the procedure to get them turned on again (e.g., fees, inspection). 

DISCLAIMER: Please consult with your accountant, attorney, and financial advisor before implementing any information displayed on this website. DIY research does not replace the advice of a licensed professional who has thoroughly reviewed your file.