While being a landlord may not be ideal for everyone, doing so can offer you a great way to bring in some additional income, and at the same time increase your net worth. Over the past few years, the demand for rental property has continued to rise, due in large part to wages not keeping up with the rising cost of housing in many areas.
But, even though purchasing rental property can have numerous benefits, there are some tips that you should abide by if you want to better ensure your success:
1) Know that being a landlord is a business.
Although buying rental property and making a “side income” may be considered a hobby for some, the truth is that this is an actual business – and, prior to going into it, it is essential that you have a good, solid business plan in place.
Doing so can help you to avoid paying too much for a property, as well as having a better idea regarding the type of home you can buy, how much you can charge in rent, and the type of tenants to seek out (and to avoid).
2) Start small.
Because many new landlords don’t really have a feel for the amount of time, effort, and maintenance that rental property can take, it is typically best to start small – and then, once you’re more experienced, add to your list of dwellings.
In most cases, single family homes will be your best bet when you’re just getting started. This can provide you with a good estimate of what the business is like, and what it will take from you in order to run it successfully.
3) Invest in areas that you’re familiar with.
When you are seeking investment property, it is always best to purchase in areas that are familiar to you. Otherwise, you could run the risk of buying a home that appears to be a great opportunity, only to find out that it is located in an area where people don’t want to live.
4) Ask for help when you need it – or even when you don’t.
Just as in any other business endeavor, it is wise to know where your limitations lie, and to ask for help when you need it. One of the best ways of moving forward with rental property – especially if you plan to add to your portfolio in the future – is to hire an established property manager.
Doing so can free up a great deal of your personal time and put the day-to-day detail of managing your property and your tenants on the property management company. For more information on how to hire and work successfully with a property manager for your investment unit(s), Contact Us.