With the real estate market becoming such a popular way to make money, you might be interested in getting involved with it yourself. This can result in making quite a bit of money to supplement your income, but that doesn’t mean it’s going to be easy. Making money in real estate involves a lot of challenges and will ultimately require a strong willpower to make things work. If you’re ready to buy your first rental property and become a landlord yourself, then take a look at the tips below:
1. Location, Location, Location
You’ve likely heard this before, even if you haven’t invested in real estate. Location is important, especially when it comes to a rental property, because renters want to be close to shops, restaurants, bars, schools, and other local businesses. You should also consider whether or not the home is in a good school district and what the crime rate is like, as a home in a safe area and near a good school will be much more likely to rent.
Being a landlord requires you to cover unexpected expenses, such as repairs or landscaping, in a timely manner. You should have enough money to cover issues that renters want fixed right away, such as roof leaks or plumbing issues, without making them wait. The last thing you want is to make renters mad by having a poorly maintained property, so always make sure you cover problems as soon as possible.
3. Understand the Responsibility
It can be easy to be drawn into a rental property when other landlords tell you how much money they make. However, it’s not always going to be as easy as collecting a check from the occupants. Just like with any home, maintenance and repair issues will pop up over time. This could be the middle of the night or while you’re at work, so it’s important to always be available. In addition to this, you may end up not renting for a while, which means having to cover the mortgage yourself. Another unfortunate reality is that some tenants don’t work out and have to be evicted, which can be a long and expensive process for the property owners.
4. The Tenant Is Important
When you’re eager to have a monthly rent check you might be tempted to take any renters you can find, but it’s important not to overlook any details. If possible, use a property management company that will not only show the home to prospective renters, but also screen them to ensure they are the right fit. This will be incredibly helpful in the long run and ensure you find a tenant that will provide you with a reliable check every month.
5. Is the Property Going to Make You Money?
Just because a property looks nice does not mean it’s going to be a desired spot for renters. There are many things you should consider in order to make sure you will generate income from this investment. Mortgage payments, repairs needed, taxes, walkability, etc., are all details that will help you determine if you’re likely to generate income (and how much) from this buy.
Investing The Right Way
Purchasing a rental property can be a wonderful way to make more money, but it’s important not to go into this blind. Consider your options, weigh the pros and cons, work the numbers, and then make the decision based on facts rather than anticipation.