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by Katie Conroy firstname.lastname@example.org
Investing in real estate can be a great way to ensure your long-term financial security. However, it’s not as simple as signing on the dotted line. You’ll need to make sure that you make a sound investment, maximize your return, and find (and keep) the best tenants possible.
TAB Associates invite you to read on for tips to buy and manage your first investment property successfully.
Assess your liability
Though the potential rewards are high, buying a rental property also involves potential risks – such as delinquent tenants, expensive maintenance, or a declining market. However, you can protect yourself and your assets from these and other risks. One way to do this is by establishing a limited liability company (LLC) for your new business in real estate investment. While lawyers can help you with this, it’s often easier and less expensive to work with an online formation service.
Choose your location wisely
There’s a lot to consider when choosing a location for a profitable rental property. Look for signs that a neighborhood is stable, growing, and not in decline. Talk to local residents to get their impression and check to see if there are any revitalization projects in the works. This could indicate that the area has potential.
You’ll also need to determine whether a property is safe from natural disasters. One way to do this is to request a geotechnical report, which analyzes a property’s risk of landslide, flooding, or earthquake damage. Fire risk is another factor on many people’s minds, so be sure to research the level of fire danger in the summer months.
If the property is low-risk, next determine whether the neighborhood is a desirable place to live. Look for whether your property is close to amenities (such as parks, gyms, restaurants, shops, and cinemas). Access to hiking trails, public transportation, and a good school district are also great signs.
Market your property like a pro
Once you’ve purchased your first investment property, the next step is to market it to potential tenants. Some ways to do this are through websites with direct listings, on-site signage, working with local realtors, and advertising in local publications. Be sure to emphasize your property’s most attractive features, such as a stunning view, easy access to amenities, or great indoor-outdoor flow.
Another way to ensure that you attract potential tenants is to improve your property’s curb appeal – its ability to make a positive first impression from the sidewalk. You can easily do this with quality landscaping, general tidiness, a fresh coat of paint, and fun touches like flowers or attractive outdoor seating. Next, consider hiring a professional photographer to take a stunning curbside photo.
Embrace your role as a landlord
Once you own a rental property, you are your tenants’ main point of contact if any issues arise with the property. Although you can always hire a property manager, this could eat into your profits early on. It may be time to familiarize yourself with the tools of the landlord trade and brush up on your DIY home repair skills. Once you’re more established, you can always put together a team of reliable handypeople, cleaners, and contractors.
Although real estate investment is often referred to as passive income, initially you will need to be anything but passive. You’ll be in charge of managing the tenants, the property itself, and the finances. Once you have good systems in place and things are running smoothly, you can take a step back and enjoy the extra income that the property provides.
Are you unsure about the next steps for your investment property? For information about architecture, planning, construction, and professional interior design, contact TAB Associates today.