There is an endless checklist of questions to deliberate before becoming a property investor. What does the property market look like? What are the current mortgage and tax rates? Do I have the finances?
Here’s a list of the basic things to consider before buying your first rental investment property.
Income property investment involves a huge amount of costs, and cash flow is crucial. For example, mortgage fees, renovation, and maintenance costs can all affect your bottom line. Property investors should use a range of calculations to plan and evaluate their investment. To help keep costs low and ensure your property doesn’t sit empty for months, property management companies should be considered.
Look further afield
Most property investors look for rental opportunities near where they live because it’s convenient for them to live close by. However, what if your area wasn’t the best investment? Hiring a property manager means you can cast your net wider and look for property in up and coming areas or University areas with good commuting links, without worrying about the distance.
Boost the property value
Property that needs renovation can be bought for less, allowing you to renovate and add value. However, the renovation costs have to be kept low to make sure you make a profit. Landlords often forget to take into consideration the cost of repairs during a tenancy so it’s worth factoring this in before investing, as well as doing a thorough renovation.
Consider your involvement
Being a landlord isn’t as glamorous as it sounds, buying a house is only the beginning. Then comes the 24/7 admin of advertising the property, finding good tenants, managing the tenants and doing any maintenance. You can choose to go it alone to save money, however, property management services do all of this for you, saving you a lot of time and costs in the long run. Happy tenants minimize the risk of an empty property, so landlords must think realistically about the time they can commit.
Like any business, knowing the target customer is key to success. The same applies to rental investments. You’re not living in the property, but think about who will be. This will help you prepare the best living arrangements for them. For example, students have very different needs to families. The more at home they feel the longer they’ll stay which is the ideal situation for your property. Once you’re clear on this and you’ve matched the home to your target tenant, if you choose to hire real property management or even commercial property management you won’t need to worry about finding the tenants for your property, they’ll do this for you.