If you know anything about investing in a rental property, you will know that it’s a big decision to make. Not only is it a financial drain to begin with, but it can als bring with it a lot of stress. This is why it is important to truly consider whether or not investing in a rental property is right for you. Here are three of the main things to think about.
1. How Much The Property Will Cost
A lot of people investing in rental properties have savings to fall back on but if you don’t, you may run into a problem or two. Starting out in the world of rental properties is difficult if you don’t have other investments bringing in money, especially when property repairs are needed, and you haven’t had a chance to turn over a profit. This is why it’s important to think about whether you can afford to keep the property running, even in times when it’s completely vacant. There is no guarantee that you will always have tenants, but you will always need to pay the mortgage and taxes. You need to make sure that you can cover the costs that come with a rental property, even if you don’t have rent coming in at all times.
2. Get to Know the Local Area and Neighborhood
It’s important to think about where you want to invest in a property, as this will hugely influence the type of renters you will have. If you want to rent to families, you should choose an area with schools close by and amenities suitable for young children. If you want to rent to young professionals, you should choose an area with modern properties and good transport links. However, it’s illegal to refuse a tenant simply because they have children even if you are focusing on young professionals. If a family meets your criteria, you can’t turn them down because they have young children.
When you are showing potential renters around the property, have information about crime rates and neighborhood amenities readily available. These could be the deciding factor between whether or not they want to rent the property. Being knowledgeable about the local area showcases you as a good landlord and sells the property to renters.
3. Consider Using a Property Management Company
Though you can save yourself money by handling everything solo, there are a number of benefits that come with using a property management company. With property managers working alongside you, there’s no need to worry about familiarizing yourself with landlord laws and you won’t find yourself answering tenant phone calls in the middle of the night. A property manager will handle the majority of the hard work that comes with renting out a property including evictions, maintenance, complaints, leases, rent collection, tenant screening, credit checks, advertising and social media. Not only does this reduce your stress as a landlord, but it also frees up a lot of your time to focus on other things.
Being a landlord isn’t easy, but it’s certainly easier when you have professionals helping you out. Before you go ahead and invest in a rental property, ensure that you are able to turn over a profit and that it’s an investment worth making. You don’t want to find yourself out of pocket a few years down the line, realising your money would have been better invested elsewhere. To increase your chances of achieving success as a landlord, carry out thorough research and ask for help when you need it.