Are you trying to build your portfolio with single family rental properties? Real Estate investment has increasingly become more popular in our current market.
Whether you are new to investing or are simply looking to expand your knowledge, there are 5 key tips you should know about.
1. Know your market
Just like anything else in Real Estate, knowing the ins and outs of the market is key. This is the foundation for a successful career in Real Estate investing.
Be sure to do your homework on the neighborhood, city, and rates. By making a rush decision, you could be out thousands of dollars.
A good rule of thumb is to research these key factors for your market:
- Local economy
- Employment
- Neighboring market
- School district
- Profile of the average resident
- Average home price
Of course, there is always more you should research to get a better idea, but this is a good start.
2. Knowing which property is the one
Aligning your goals with the type of property you plan on investing in is just as important as knowing your market. You must consider the objectives and risk.
After doing your market research, you will be able to determine what your goals are and the risks that might pose a threat to them.
Should you buy a more expensive home in a new area, or several more affordable properties in an older area? What are the maintenance costs associated with these areas? Will the average rate of rent give me a return on my investment?
These are questions you should be asking.
3. Know your contractor
Once you have your properties in place, you will need someone to help you get them rental ready.
Prospective tenants are going to want to move in quickly, and they are expecting a maintenance free home. You will need a contractor who is speedy but still performs quality work.
Find someone who is licensed and insured, conveniently located, and a contractor you can keep a lasting relationship with.
4. Know your tenant
The screening process is imperative on if your investment dollars will be spent wisely. You will need to be sure you aren’t opening doors up to tenants who will cost you in missed monthly payments or even a pricey eviction process.
As a Real Estate investor, you are more suited in working with homes rather than people. So, this process may be a bit overwhelming. This brings us to our last tip.
5. Develop a system
You will need to have a process in place for any issues that may arise. The easiest way to be sure everything is being handled properly down to the last detail is to hire a Property Management company. That way, you can be sure tenants are being screened properly, maintenance issues are being handled in a timely manner, and your properties are being marketed at a high rate.
Having a team handling your properties will help to keep everything on track and organized. As well as take the burden off of you. Property Management companies keep up with tenant-landlord laws as well, so you won’t get caught in an awkward situation.
Owning rental properties is a highly rewarding experience. There will be struggles and stressors throughout it all; it’s a learning process. However, you can limit the stress by implementing a system and hiring professionals who are sure to be on your side.
