You're about to take the plunge and buy your first investment property. Should you buy something that you can live in, something you can develop and sell on, or should you buy a designated rental property? If you are going to choose the last option then you need to do your homework first.
When it comes to property management, the most important thing you can do is to screen well. You need to make sure you are putting the right people in your properties, otherwise you will be in for a world of hurt both financially and emotionally.
Caring for essential property maintenance is key to running a successful rental property business. Maintaining your investment property is an ongoing job to ensure you avoid huge repair bills. Also, as the property owner, you have a legal duty to your tenants to provide inhabitable conditions. Rental property maintenance is not something you can leave until your tenants complain about not having heat or hot water.
Being a successful landlord means more than collecting rent from your tenants. Sure, rental income is your primary source of cash flow. But making a healthy profit as a landlord requires managing properties and tenants properly. Even the way you collect rent from tenants can affect how profitable your business is.
Many potential real estate investors come to us asking a lot of questions about what to do and where. Where's the "best" place to buy real estate? What's the "best" way to market? What's the "best" way to find funding?
There is no doubt that you want to be the best landlord possible, and that means being on top of absolutely everything. But it's easier said than done. Being a successful landlord means trying to juggle rent collection, property maintenance, and keeping tenants happy. So, communication is crucial if you want to be the ultimate landlord.
Why would one want to invest in real estate? All realtors will tell you: appreciation, cash flow and depreciation. Undoubtedly, over time, real properties will again rise in value. Even with the pounding that prices have taken, over the past 10 years (as August 2010), residential properties, on average (Case Shiller/SP 10 City data), outperformed the S&P 500 +47.3% for real estate, -30.9% for stocks! If you are saving for retirement, doesn't it make sense to diversify using investment properties?
Landing a good resident is easy- if you know how to do it. There are many tips and tricks you can use to make sure that you get quality residents, all year round. A bad resident could not only reduce your profits, but also cause you problems in the future. In turn, this could lead to time wasting and legal issues that could prevent you from serving your other tenants.
You heard a lot of reasons why not to be an active landlord when you first got into real estate investing. One of them was this: you'd never be able to take a vacation again. The truth is that you can get away for a weekend or even a week, as long as you prepare ahead of time.
Deciding to invest in real estate can be a great decision. However, finding the right niche is an entirely different topic. You need to decide on what type of investments to focus on first, set your foundation and then try to diversify in the future. Most of the time, this is going to be based on what type of properties you choose. If you’re looking for something with less upfront involvement, turnkey real estate may be the right choice for you.