Since rental property investing is perhaps one of the almost risk-free investments out there, I just wanted us to discuss rental property investing dos and don’ts.
When it comes to investing your hard-earned money to make it work a little harder for you, it can be difficult to decide how to ensure the safety of your savings. Although you stand to earn a tidy sum on stocks and shares, they can also be fairly risky. And even bonds are not thought to be particularly stable now. In fact, the prospect of investing in the current economy may have you running to hide your savings in the mattress. But don’t put your moola into a wall-safe just yet; first think about how it might meet your needs by purchasing four walls and become a landlord. Investing in property can be a great way to show a return down the road, and considering the state of the housing market, you really only stand to gain. But you need to know what you’re doing so that you don’t end up with a money-pit of a rental property, and here are a few dos and don’ts to help you out.
Rental Property Investing Dos:
1. Know your stuff. Learn About Property Investing.
If you don’t know the first thing about property investment, you’d better learn before you start snapping up homes. You should be familiar with local neighborhoods and amenities (school district, police force, etc.) and you should also track house prices and average rental rates in areas you’re interested in and look into drawbacks such as crime, natural disaster, and so on.
2. Take on partners.
Any time you can invest other people’s money in a bid to earn more yourself, you should definitely do so. Taking on investment partners can be a great way to dispel risk and maximize rewards.
3. Find a great agent.
Unless you’re an agent yourself you’re going to need a professional to help you with the details of renting to tenants. So, get referrals, shop around, and find an agent that is reliable, knowledgeable, and trustworthy.
Rental Property Investing Don’ts:
1. Bite off more than you can chew.
The general rule of thumb is never to purchase a property that you can’t afford to pay on for at least six months. The flipping market is pretty much kaput and it may take you several months to make the place habitable and/or get renters in. So, you need to plan for this eventuality. And make sure that the rent you can reasonably charge won’t leave you with additional expenses; it should cover the buy-to-let mortgage and then some.
2. Buy “as is”.
No matter how good the price is, you should never buy without an inspection. This can make it difficult to buy bank properties and repossessions, which may seem like the best deals around. But you want to at least know what you’re getting into before you buy. You may be willing to make fixes, but you should never go in blind.
3. Be convinced.
Even awesome agents are in business to make money, and if you wind up using an agent that is a bit unscrupulous, you could get pushed into a property that you really don’t want or that you can’t handle. Rental properties Bristol to Bombay may seem appealing, but if you’re just not sure, follow your intuition and wait for the property that’s right for you.