Top Tips When Buying Investment Property in Oviedo

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Home to over 41,000 residents, Oviedo offers residents a small-town vibe with close proximity to some major commercial hubs. With Orlando just 20 miles away, Oviedo residents have quick access to all the enjoyable highlights and attractions the city has to offer.

Oviedo is popular for its historic buildings, excellent facilities, quality schools, and its chickens. That’s right; Oviedo has managed to keep a rural feel. The flock of chickens that roam the city streets are rumored to be direct descendants of one hen that roamed the streets alone about 30 years ago.

If you are thinking of buying an investment property in Oviedo, now is a great time to do so!

Oviedo ticks all the boxes when it comes to being a great investment destination. From great attractions to excellent schools to being a short drive to nearby cities such as Orlando and Kissimmee, investing in Oviedo real estate can yield exceptional returns on investment.

In this article, we at RentSmartUSA will go over the basics of buying an investment property in Oviedo. So, follow the following proven tips to avoid common mistakes and maximize your rental income:

What is the Oviedo Real Estate Market Like?

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The Oviedo real estate market is booming!

Buoyed by a growing economy, recognition as one of the best places to live in Florida, and excellent and nationally ranked public schools. Oviedo has grown to become a destination for investors and families alike.

The following are some of the accolades that Oviedo has received over the last few years:

  • How Money Walks ranked Oviedo amongst the best destinations in the country for raising a family.
  • Relocate America named Oviedo as among the best places to live in the country.
  • A WalletHub survey concluded that Oviedo was one of the best places in Central Florida in regard to education, economics, and life.
  • AreaVibes gave Oviedo a livability score of 88 out of 100 based on the quality of education, low crime rate, and quality amenities that residents enjoy.
  • Money ranked it #43 in their “Best Places to Live in 2020.”
  • Niche ranked it in the first position for being the “Best Suburb to Raise a Family in the Orlando area.”

Top Tips for Real Estate Investments in Oviedo

Minimize Debt

For savvy investors, carrying debt as part of their investment strategy can make sense. But the average person should avoid it or at least keep it as minimal as possible. Personal debt may include things like unpaid medical bills and student loans.

If you have any of these, buying an investment property may not be the best option for now. But if you choose to do so nonetheless, then make sure you have some form of cash cushion.

In other words, make sure that the investment you invest in yields a higher return than the cost of debt. The last thing you want to do is put yourself in a position where you are unable to service your debts.

Secure a Sizeable Down Payment

You’ll need to put down a larger down payment for an investment property than you would an owner-occupied home. Also, the approval requirements tend to be comparatively strict.

Traditionally, a mortgage down payment is at least 5 percent of a home’s sale price. This is, however, not going to suffice when it comes to an investment property. At the very least, you’ll need to put down 20 percent as a down payment.

If you are unable to finance it on your own, you can obtain it through bank financing, such as a personal loan.

Choose the Right Location

To maximize your ROI, you’ll want to invest in the right location.

For example, a location where the population is rising, infrastructure is developing, or there is a revitalization plan underway. You’ll want to avoid areas that have a dwindling economy, high crime rates, declining population, or low employment rates.

An ideal investment has the following features:

  • Plenty of amenities
  • A decent school district
  • Low property taxes
  • Plenty of amenities
  • Growing job market
  • Low crime rates
  • Easy access to public transportation

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Know Your Margins

Don’t make a blind investment; understand the potential returns first. At the very minimum, set a goal of a 10% return on investment. For example, if you buy an investment property worth $300,000, then make sure the potential ROI is at least $30,000 a year.

Next, estimate the operating costs of running the property. Generally speaking, these are usually 1% of the property value annually.

Examples of common operational costs include property taxes, possible homeowners’ association fees, homeowners’ insurance, and regular maintenance for repairs.

Make Sure The Property Is Rent Ready

Fixer-uppers can be tempting. They usually come at a bargain, and after repairs and improvement, can be flipped for great margins. But unless you are an experienced contractor or involved in many home improvement projects, you’d steer clear of these properties.

Instead, go for turn-key properties. This is a fully renovated property that you can just buy and rent out immediately.

Hire a Property Management Company

The job of a landlord is not easy or glamorous. Besides investing in the right location, readying the unit for renting, and finding great tenants. There are always maintenance hassles and other headaches that come with the territory of being a landlord.

So, if you’re just starting out, it may be in your best interest to simply hire an experienced property management company to handle these responsibilities and safeguard your investment.

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Bottom Line

Oviedo has a lot going for it: great schools, plenty of attractions, a great location, and plenty of accolades. Be as it may, real estate investing requires proper due diligence. And that’s where RentSmartUSA comes in!

We have over 20 years of experience in the Orlando real estate market. Get in touch to learn more!

If you’re ready to buy in Oviedo, then contact RentSmartUSA today!