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Buying an investment property is one of the most exciting businesses to do in the real estate industry. Whether you are looking for a commercial or residential property, there are many details to consider before fully immersing yourself in the rental real estate arena.
It’s important to remember that investment properties are still an investment, after all. You will need to be prepared to invest time, money and even equity to get the most out of your investment. Although there are challenges to overcome and it is not always easy, there are some very useful tips to help you when buying an investment property.
1. Give yourself an honest review
Do you have what it takes to be an owner? While you may want to answer this question with an emphatic “yes”, you need to think deeply about what being a landlord really entails. Being a landlord is a tough job that requires you to work on the clock 24/7/365.
Some people buy their first investment property without ever considering the responsibilities that come with owning a property. Making tough decisions about what colors to paint the walls or what appliances to install in the kitchen will be one of the easiest things to manage in the grand scheme of things.
Thinking about how you’ll react to a tenant who can’t (or won’t) pay their rent or what you’ll do if they continually violate your tenancy agreement are things you’ll need to consider before jumping in. real estate investment game. If you’re a particularly friendly and understanding person, you’ll need to learn to separate your emotions from some of the tougher decisions you’ll make if you want to be as successful as possible.
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2. Do your research
There’s nothing worse than buying or financing a property outright, only to find that the roof needs replacing, the foundation is knocked down, or there’s a mold problem. Some investors like these types of homes because they plan to rehab the home or property and turn it into their exact vision. But if you’re just starting out or don’t believe turning or rehab will be what meets your wants and needs, then inspections and second opinions will be your best friends.
There is usually more than meets the eye when it comes to a property. While this can sometimes be a good or even a great thing, it can also be disastrous. Savvy investors know what they’re getting into before they sign their name on any legally binding document. Knowing the ins and outs of ownership is an absolute must before writing your name on the dotted lines.
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3. Don’t forget the marketing
Finding the perfect investment property for your needs is high on the list, but it’s easy to overlook the fact that you’ll eventually need tenants to occupy the space so you can eventually have positive cash flow.
Although you may not need to go so far as to hire a marketing agency to take pictures and advertise your property, it may be in your best interests to do so. After all, an empty investment property will burn a hole in your pocket faster than many other items. Spreading the word is a crucial part of being a successful investor and one that can be quite costly if done ineffectively.
Think about the mediums you want to use to advertise for websites and other web advertisements. Even the newspaper can provide good publicity for your property.
Buying an investment property presents an incredibly exciting opportunity. While it’s easy to get fixated on what your results will look like or what work needs to be done right away, having a long-term view and keeping an eye out for the small details will ensure that your investment is an absolute success.
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