Real estate investments are powerful and a great way of creating passive income for yourself. Adding real estate to your portfolio will help increase capital for more investments in the future. However, it can be a risk starting out. It is important to understand that you are buying property, but it represents a business and should be treated in that way. If you’re a beginner looking to invest in rental properties, we have put together some quick tips on how to hit the ground running.
1. Do your research. Advice from other real estate professionals is critical to tip you off in the right direction, but it is important that you do your due diligence. Read related articles and books, attend seminars, take online courses, and/or anything that helps you feel confident going into a deal.
2. Get a clear understanding of your costs. This means all of your costs, not just the original sale and mortgage. Estimate costs for repairs, maintenance, marketing, and even what it may take to hire a property management company. Compare your options and create a financial forecast for yourself to make sure it makes realistic sense.
3. Analyze the marketplace. Check similar properties in your area to see what tenants are willing to pay for a rental unit. It is important to ensure your bottom line pencils out compared to what you will be earning from rent payments.
4. Invest in turnkey real estate. Save yourself the headache. If possible, find a turnkey rental property that has existing tenants and property managers to create a smooth transition into your new venture. There is no need to reinvent the wheel.
5. Know your strengths. This tip is often overlooked; and, whether you may be aware of it or not, you have a niche. Discover your niche and what areas you may know best, and look for properties that best fit those qualities. It will be easier to handle this new investment if you are keen to it.
Need more information to get started? Get connected with your MGR Representative today to learn more. We have been managing investment portfolios for nearly four decades and can help guide you toward making the best decision for investing in your first rental property and our property management services will ease your burden further.