If you're considering making a rental property investment, know that now is one of the best times to take that plunge. You probably already know that rental property investing has given rise to a whole lot of wealthy people.
However, as a property manager, you need to know a bit about investing in rental property before you dive in and start searching for a property to purchase. In this article, we'll give you a few tips to get you started.
1. Determine if You're Cut Out to Be a Landlord
The first thing you need to do before getting into the rental property business is think long and hard about whether you're ready to become a landlord. It's not an easy job, and you truly need to be available to your tenants 24/7.
However, once you're gotten your property, you can hire effective property management and leave the day-to-day operations to a skilled property manager.
2. Pay Down Your Personal Debt First
The last thing you want is to go into rental property investing with many bills already on your plate. For example, if you have student loans, medical bills, a ton of credit card debt, or children that will be heading off to college soon, purchasing your first rental property now might not be a strategic move. Get all of those things paid off first, then start searching for the perfect investment to get you started.
3. Don't Fall Into the Fixer-Upper Trap
While it might seem to be a good idea to purchase a fixer-upper as your first investment property, just don't. Unless you know a contractor that will work cheaply or have the experience and time needed to fix the home up yourself, it's not going to end up being worth the money in the long run.
Instead, purchase a ready-to-rent property, make a few minor adjustments, and then rent it out. Once you're established and making money as a landlord, you'll have time to purchase fixer-uppers to flip into rental properties.
4. Know the Rental Laws Ahead of Time
Research and learn the rental laws regarding tenants and landlords in your state before you ever start investing in property. For example, you need to know laws and rights pertaining to lease requirements, security deposits, fair housing laws, and eviction laws to avoid legal trouble down the line.
The last thing you want is to invest in the property only to find you're going against the laws in the state you're living in.
5. Start With a Low-Cost Home
The more expensive the property, the more expensive your costs are going to be. While it could be tempting to purchase an expensive home to rent out, you're better off with something less expensive in the beginning.
Ready to Invest in Rental Property?
Are you ready to invest in a rental property today? If so, make sure to follow all the tips above.
Next, contact us to help manage your properties, so you can spend your time looking for other property investments to add to your list.