Buying a second home that you intend to use as a rental property may seem like an easy, low effort way to rake in some extra cash every month. But it often comes as a surprise to investors that the process, and all the aspects that are involved, may not be quite as simple as they had originally expected. 

Before you jump into the new purchase of a Branson home or apartment that you intend to market as a rental, consider these few topics to help you avoid any hidden surprises. 

Know The Tax Advantages

As you consider the financial aspects one of the positive aspects will be the tax advantages that owning a second property can bring. All mortgage interest, property taxes, upkeep maintenance and other expenses can be deductions on your tax. The depreciation of the property can also be used as a deduction. Contact your tax advisor for more information on what deductions are allowed and to learn all of the applicable tax benefits. 

Do Your Research

Don’t jump the gun and purchase just any property that you come across. Be sure to do all of the research that you normally would, as if you were purchasing the home to live in yourself. 

Think of all of the amenities that you would find an attractive selling point - those will be all of the same amenities that your future tenants will also be considering as they are shopping for a new place to call home. Is the property in a good school district? How close is the property to grocery stores and restaurants? How about proximity to theaters, parks and other activities? Having things to do close by is usually very attractive to tenants.

Ease of transportation is also a feature that many will look at. Check the city’s transportation schedule for public transportation in the area and don’t forget to check what the parking situation is for your tenants who own their own vehicles. They will definitely need to have easy parking close by.

Do The Math

As you do the market analysis on the market where this rental property is located, make sure the numbers you run show the whole big picture. Don’t just look at the cost of the mortgage vs how much you will be able to charge for rent. Consider all figures, which would include, mortgage interest, property taxes, cost of maintenance for repairs and upkeep, such as pest control. Another figure to consider as well, would be any management fees that may be incurred if you should choose to hire a property manager. All of these charges will certainly have an impact on your bottom line. 

You Will Be The Landlord

So many investors overlook the reality that once they write a lease on their rental property, they then become the landlord to their tenants. Being a landlord involves many more additional aspects than just collecting the rent payments. As a landlord, you are responsible for marketing, showing and leasing the property. The landlord is the main point of contact for any questions regarding billing and rent and can potentially be called at any time - day or night - should there be a maintenance emergency. The landlord is in charge of collecting rent and enforcing any late fees or collections, should their tenants not follow through with timely rent payments. To top it all off, in the undesirable event your tenant fails to fulfill their lease agreement, pay rent, or move out, as the landlord you will be in charge of filing the necessary paperwork with your lawyers to request their eviction and will have to go to court. All of these tasks can add up to be very time consuming, which equates to costing you money. 

The only way to avoid the responsibilities of being a landlord is hiring a property management company to work on your behalf and to execute the entire rental process every step of the way. A property management company will be well versed in the legalities and effective practices to make your experience as a property investor as smooth as possible. 

These are all things to consider before buying a second home as a rental property. Be sure you take all of these factors into account as you make this decision which will impact your financial and personal future. 



If you have purchased a second home in Branson, that you would like to lease as a rental property, but do not want the added stress of being the landlord and managing it yourself, call Thousand Hills Realty at (417) 337-8081. We are Branson’s premier property management company and we would appreciate the opportunity to put our experience to work for you!