Rental property is a very good investment. While your property is appreciating in value, your tenants are paying for your mortgage and perhaps even contributing additional cash flow. Here are some tips for successfully investing in rental properties.
1. Hire a Management Company
Managing rental properties can be a real headache. You have to find tenants, screen them, stay on top of maintenance issues and deal with problem tenants. Start off right by hiring a rental property management California company to manage your rentals for you. This will give you more time to look for great real estate deals.
2. Make Sure the Numbers Make Sense
Don’t develop an emotional attachment to a particular rental property. Instead, do an analysis to make sure that the numbers will work out for you. You might want to follow the 2% rule, which states that your rental property should bring in at least 2% of the property’s price in monthly rent. This should be enough to cover all your costs plus some extra for unexpected expenses.
3. Purchase a Property That Is Ready To Rent
Don’t be tempted to save money by purchasing a rental property that needs a lot of repairs. Unless you are very experienced, the cost and time required to fix up the property will not be worth it. And, while you are renovating the property, it may be sitting empty and not bringing in any rent.
4. Get an Inspection Before Purchasing
You don’t want to be hit with unexpected expenses for major repairs, so be sure to get a professional inspection of the property before you agree to purchase it. If the inspection only turns up minor issues that you think you can handle, you can use these to negotiate a lower price.
By following the above suggestions, your real estate investing career can get off to a promising start. You will soon be expanding your real estate portfolio by finding additional profitable properties to add to it.