Investing in real estate is more than an investment of your money: it's an investment of your time. Understanding what you're getting into before you dive in is the best way to get started building a portfolio—with less risk.
Before purchasing your first investment property in Selma, take the time to learn more about some critical investing basics! We've put together some simple (yet foundational) ideas for both seasoned investors and new property owners.
The Right Property
We all want property investing to be a positive experience. The problem is that the right property isn't going to jump out at you: you have to work to find the right property—and then continue to work to keep the experience positive.
- Take your time choosing your investment property.
- Study the local market and choose the best area for your rental property.
Location is one of the biggest keys to success when purchasing a rental property: whether your budget is 100,000 or 500,000, the area you choose in Selma will help determine the amount of rent that you can charge.
Use Research to Determine Rent
- Work out a budget that will yield the highest return on your property.
- Consider what you pay for the property every month and any incidentals that may come from owning the property and find the right amount of rent.
Charge too low, and you will end up losing money. Charge too high, and you will have a hard time finding the right tenant. Charging a fair price is crucial to attracting and securing the right tenants.
Avoid the "Diamond in the Rough"
Once you have found the right property, remember that it's going to take more than just handing over the keys to rent it out. Decide on any updates that you may want to do to the property and get them out of the way before looking for a tenant.
On the flip-side, don't look into severe "fixer-upper" properties: this is a good way to drain your time and money, especially if you're just beginning to invest in your portfolio. Leave those to homeowners and property flippers.
What Tenants Want
Your tenants want the same things in their home that you want:
- Access to schools and jobs are a big factor in many people's decision to find a home.
- A shorter commute with proximity to attractions makes life easier for them.
Be sure that your rental property is close to enough culture and structure that it makes for a sound investment.
Safety and cleanliness are also very desirable to tenants: your Selma investment property should be move-in ready at all times when vacant. Any mess left by previous tenants should be thoroughly cleaned, and the property should be in the best condition it can be.
We can't stress enough the value of location, so consider the safety of the area that you are purchasing a rental property in as well. Safe neighborhoods will attract better tenants who are willing to stay in your property long term.
Be sure to properly maintain your investment property: your tenants will appreciate timely and professional repairs, should anything go wrong. If the air conditioning goes out in the middle of summer, be sure to have a professional come to the property as soon as possible to resolve the issue. Keeping your Selma investment properties in peak condition for your tenants also reduces your risk as a landlord.
Screen Your Tenants
Before having anyone sign a lease, be sure to do a background check on your new tenants.
- Criminal history and credit history will tell you a lot about your prospective tenants.
- A history of criminal behavior may lead to activities you don't want happening on your property.
- This can lead not only to damages that dent your ROI but legal issues as well.
A tenant with imperfect credit may seem to be a bad choice for your investment property. If you can, call previous landlords and inquire about the tenant's history:
- Did they pay on time?
- Did they get their security deposit back?
- Were there any complaints from other neighbors to be aware of?
Find out all you can about the tenant's finances to ensure their ability to keep up with the rent.
A Property Manager in Selma Can Do It All!
Hiring an expert property manager in Selma is a great way to learn the ropes of the investment property business. You can learn how to become a better landlord by allowing your property manager to take control of the menial tasks that are the foundation of your success. Sit back and watch someone else do all the work while you reap the benefits of long-term wealth.
If you're looking to get into the investment property business but are unsure where to start, Real Property Management Campanas has put together the perfect guide for you! Download your free copy of "Real Estate Investing: Grow Your Portfolio," and get started developing your future through real estate.