The recent wave of properties entering foreclosure has prompted novice investors to try their hand at real estate investing. Many are shying away from property flipping, because they fear the newly renovated property won’t move fast enough once it’s back on the market, shrinking profits drastically. However, there are a number of investors looking at the abundance of foreclosures as an opportunity to get into the rental property business.

It’s certainly a great idea for someone who knows what they’re doing or does their homework, but there are a number of factors that should be taken into consideration first.

·         Consider the market. Do some research and find out what the percentage of renters to homeowners is in the local area.

·         What’s the average monthly rental for a home similar to the one you’re considering? You won’t be able to command a fee much higher than the average unless your rental property is something special.

·         Consult with an Idaho mortgage broker. Find out what your financing options are for an investment property, and what your monthly mortgage will be. For rental properties, it’s a good idea to escrow your taxes and insurance so you’re not surprised by a tax bill mid-year. Will the average month’s rent cover all your expenses?

·         Create a budget. You should be able to cover several months rent without a tenant. Depending on the amount of work that needs done to the property to make it tenantable, you may even need to pay several months rent upfront before even renting the property out. Things happen – tenants don’t pay, they break their lease, and you’re the one stuck with a mortgage to pay.

·         Buy smart. There are an abundance of foreclosure gems in the Idaho real estate market right now, but never buy a property without a tour and inspection. Often foreclosures have unforeseen problems that must be repaired before renting the property, and without a property inspection, they could be easily missed.

If you follow these simple guidelines and invest wisely, now is a great time to get into investing in Idaho real estate. Property values will begin to creep up again over time, and you’ll be building equity in a property that you’re really not paying for (or at least not paying much for). Work with a trusted Idaho lender to get the best financing options available.

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