When looking at getting into the investment property game, there are many things to consider before you jump in. This article is designed to be a helpful guide to considering some of the more important elements in real estate investment.
- Start with a single-family home. In most cases, investing in a single-family home is a much safer, smarter way to get started. The upkeep of such homes is simpler than it is for multi-unit properties. When something breaks or requires replacement, you’ll only need to fix one thing instead of several. The management of a single tenant is exponentially easier than wrangling two or more.
- Purchase a low-cost home. The more house you purchase, the higher your ongoing expenses will be. Many experts recommend starting with a $150,000.00 property. This keeps your mortgage manageable, perhaps even affording you the opportunity to pay a little extra every month with the intent of paying off the mortgage early.
- Don’t buy a fixer-upper. This may seem a little counter-intuitive to the point just above, however it doesn’t have to be. One can find a decent home in good condition at a low cost – without it being a fixer-upper. It is much wiser to purchase a home that is listed below the market price and make only minor repairs than to try to fix and flip a property when that’s not really your skill set.
- Location, location, location. The quality of the location you choose will influence the quality of the tenants you attract. Look for things like low property taxes, decent school districts, low crime rates and an area with a growing job market. You’ll also want to look for a strong list of amenities such as parks, shopping centers and restaurants.
- Work with a property management company. As a new investor, it is easy to be overwhelmed by the myriad of questions, problems and unexpected events that always – ALWAYS – come along with becoming a landlord. You are far better off hiring a professional property management company, and letting them find and interview prospective tenants. They will handle the 2AM phone calls and they know the contractors to call when the furnace breaks down or the washing machine starts leaking.
There are many other factors to consider when thinking about jumping into real estate investment. We would be happy to engage you in a conversation, and, if it makes sense, to work with you as your preferred property manager.
Here are some resources to help you as you consider investing in property:
https://www.investopedia.com/articles/mortgages-real-estate/08/buy-rental-property.asp
https://fitsmallbusiness.com/buying-your-first-rental-property-tips/
