This guest post was contributed by Mark Klein.
As an independent landlord, you have put a lot of time into fixing and maintaining your properties. You work tirelessly to provide your tenants with a solid place that they can call home. While renting out your current stable of units is great, many landlords want to expand their operations.
If you want to do this and do it effectively, you need to familiarize yourself with the art of property investing. While it might seem simple, there are a lot of intricacies and nuances that go into property investing. It’s possible to get it right and walk away with a great deal, but the opposite is also true.
To help you out, this article is going to go over 4 different property investment tips that all landlords should make an effort to remember.
Many homes that require a little TLC can be purchased at incredibly low and fair prices. There are plenty of “fixer-uppers” that have a ton of potential, and they just need someone to realize it. Some people might also attempt to sell a house in bad condition, and these can be found very affordably.
Of course, if you decide to get a fixer-upper, be sure that you know what you’re getting yourself into. Be aware of what needs to be changed or added to the home, and do some digging into how easily you can make it happen.
It could take a lot of time, and a lot of money, to get this home where you want it to be. If you don’t have the time, skills, or energy to make the changes, and can’t afford to hire someone who does, then you may want to steer clear.
Next, another incredibly important property investing tip is to crunch the numbers. You need to make sure that the purchasing price of the home, as well as any maintenance and other costs, can be recuperated over time. As such you need to be able to charge a high enough rent to cover costs and eventually see a profit.
When crunching numbers, don’t forget to consult your own budget. You want to ensure you only purchase a home that you can comfortably afford. Be sure you have a large enough down payment to satisfy the rules, but also ensure you bring in enough income to cover the additional mortgage and maintenance costs.
If you attempt to purchase a property as a landlord, without going over the numbers, you could find yourself in a lot of trouble. Finally, don’t forget about more miscellaneous costs like taxes, vacancies, hoa fees, legal fees, and management fees such as listings and tenant screenings. These extra costs often get forgotten when reviewing a property.
Knowledge is key when it comes to being a good landlord. You need to know your area and market like the back of your hand. You should know the average price for new homes in the area, as well as how much people there are comfortable paying for rent. Using these figures, as well as taking an unbiased look at your unit can help you choose the right amount of rent to charge.
Also, you need to know what tenants in the area are looking for. Many want a secure building, an area with low crime, ample storage, and privacy. Also, be sure to know what makes a market a good option for landlords. Generally, you want an area that is on the rise, has a high occupancy rate, and one that is near amenities like shopping, schools, and parks.
Purchasing an income property that you will rent out to tenants is vastly different than purchasing a home that you’ll live in. When you purchase a home to live in, planning for your expenses and maintenance is easy because you know how you will treat the home.
But with a tenant, you can never be quite sure how they will treat the home, and need to be prepared to financially cover the maintenance costs that could arise. This could be as simple as replacing a light bulb that broke, to a burst pipe or a broken washing machine. To prepare, have a separate account that is reserved for emergencies and other unexpected costs or challenges you might face.
If you can remember the four tips that we covered in this blog post, you will be well on your way to being a better property investor. Crunching the numbers, knowing your market, expecting the unexpected, and not being afraid of a little hard work are all great things to remember when investing in property.
About the Writer
Mark Klein is a super-connector who helps businesses find their audience online through outreach, partnerships, and networking. He frequently writes about the latest advancements in digital marketing and focuses his efforts on developing customized blogger outreach plans depending on the industry and competition.
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