You invest in real estate to make money. The best investments are those that make the greatest amount of money with the least amount of effort. So you want to put a value on the time you spend managing your investment as well as the money you put into it.
How do you make more with your investment? First you need to start with the best loan. One of the experts at Integrity First Lending can get you started with that.
When starting your investment, make sure you get a great licensed home inspector to look for hidden issues with your property. Two things you may not know how to look for that will cost you in the end are mold and structural damage. The time it takes you to repair these problems is time you won’t have tenants in your home. Large amounts of money can be lost here.
Consider landscape. When you buy a home you’re going to live in, you understand the work involved in keeping up a beautiful yard. Tenants may not have the same love for beauty as you do. However, when trying to find someone to occupy the residence, they may expect to see the property in perfect order. This is a two-edged sword that you don’t want to get caught up in. Keep yards and gardens to a minimum. Consider low maintenance yards when you’re looking for the perfect property.
When your investment is empty, you aren’t making money. In fact, you’re spending money on maintaining the loan. Every time a renter leaves the property you incur the cost of paint, possibly new carpet, etc. Keep turn over down to reduce the overall costs. This might mean higher deposits, or higher rents to get a higher quality of renter in your property.
Before you purchase a property, check out the neighborhood. Are you purchasing a home where you can get renters that can be proud to live there? If they’re comfortable in their new home, they will stay longer.
Check up on references before renting. Who better to know what kind of tenant you’re getting than a previous owner. It only takes a few moments of your time to save possibly thousands in repairs. Check out the length of time a prospective renter was in their previous location, and the reason why they left.
Remember this is an investment property. You’re not here to make friends or cut corners. Renters expect to pay for extras. Make sure when you rent a property you protect your interest. Charge a damage deposit that is reflective of the type of property. If you’re renting a single family home with a yard, there is more to get damaged. Consider the current cost of repainting, repairs, and carpet.
First and last month’s rents are standard for most investment properties. Don’t undercut your safety net. A common item that is overlooked is pets. So many people are looking for pet-friendly rentals. The trick is getting a pet that isn’t going to attack and destroy. To motivate your new tenant and their four-legged friend, try charging a pet deposit and a monthly pet fee. This helps to minimize the overall damage, if there is any. If they leave the home free of damage be honest in giving a refund.
When you make the decision to become a real estate investor, and you start with your first property, make sure you have the best team to get you started. You need a broker with expertise in real estate investing. You don’t want to settle for just any loan. Find a great home inspector. And find a great attorney to look over your documents. A lot of money can be saved when working with the right team of home loan professionals.