Learn 5 Ways To Help Ensure a Successful Rental Investment
- Invest in an area you are familiar with. Be careful when buying a property that is priced really low. It may be because it exists in a neighborhood nobody wants to live in or the schools are not desired. This is just one of the reasons why familiarity with the area is crucial to your success.
- Start Small. Starting out with a single family home as opposed to a condominium or other multiple dwelling residence is recommended. Your first experience as a landlord is likely to reveal areas that need improvement. Dealing with 1 set of individuals versus multiple sets is not only easier it’s also safer. Less tenants equals less things that could potentially go wrong.
- Make Sure Your Finances Cover What You’ll Need. Besides having to put 20% down on the purchase of your rental property, you’ll also need to have an additional amount to cover property taxes and insurance. It doesn’t end there either. You should also plan to put 5% of the rental income, each month, aside for repairs and times of vacancy. It’s a fact – things break and people move
- Hire a Property Manager. While it may seem like a big bite out of your rental income especially if this is your first time owning an investment property; it’s often a necessity. Unless you plan to treat the property as the full time job that it is, you should strongly consider hiring a property management company. Besides taking a tremendous amount of responsibility off your hands they also collect rent from tenants which many investors find to be their least favorite activity.
- Keep Your Tenants Happy. Having a vacant property is by far the largest expense when it comes to owning a rental. Take good care of tenants that pay rent on time and overall take good care of your property. The longer they stay the less expenses for you. Finding another set of “as good” or better tenants may be hard to find.