I’m happy to present a guest article by blogger Katie Conroy below!
Buying your first rental property is a big decision. While owning an investment property can be profitable, you will need to take certain steps to ensure maximum returns on your first real estate investment. Here are three of the most important moves you can make as a first-time real estate investor.
Research How You’ll Finance an Investment Property
Before you start researching contractors and property managers, you need to begin researching real estate prices. The housing market in the United States is still going strong, with prices expected to continue to rise over the coming months, so know that you may end up paying more for your new home than you would have in previous years. If you are looking for ways to save on your new investment property, you could always look for foreclosures in your desired area, but be aware that these homes may need significant upgrades and repairs. Obtaining a home loan for investment properties can also be more challenging than for a primary residence. You may need to put more money down or pay a higher monthly mortgage payment in order to finance your investment purchase.
Make Sure Your Investment Property Is Comfortable
If you want people to rent out your home, you need to make sure tenants and guests will feel completely comfortable staying or living there. One essential amenity that every investment property owner should consider adding is a central AC system. According to HomeAdvisor, you can expect to typically spend anywhere from 3,757 – $7,277 to have a new system installed in your investment property, and several factors can impact your project costs. For example, the size of your new unit, the difficulty of your installation, and the sort of labor needed for removal and disposal of an old system can all make a big difference when it comes to the final cost. While this is one of the more expensive projects you can take on when it comes to updating an investment property, it can also be one of the most important ones, especially if your home is located in an area prone to excessive heat.
Other property features you may want to think about before you even purchase your home include local crime statistics, school ratings, and local amenities. Understanding these features, as well as the costs involved with owning, updating, and maintaining your new investment property, is key to ensuring you’re buying the right home.
Consider Your Options for Maintaining and Managing a Property
If you are thinking about purchasing a vacation rental property, then you should consider using an experienced management company instead of attempting to market and manage your vacation rental home solo. Look for a property manager that provides 24/7 support for your guests, professional-level cleanings in between bookings, and access to updated booking information for your rental property. This will help your vacation rental stand out from the competition, and you will not need to worry about spending countless hours marketing your home to attract new renters.
Looking to invest in a residential rental instead of a vacation home? Then you should still take the time to weigh the pros and cons of using a property manager to market, manage, and maintain your new home. Since you are new to real estate investments and property management, know that professional property management companies have the experience and knowledge needed to keep your home occupied and your rental profits coming in consistently. Wondering what property management will cost you? Check out this guide to property management fees.
Investing in real estate for the first time can be pretty scary, but following the steps in this guide can ease those fears. So keep this guide handy and be sure to research all your options when investing in your first real estate property.
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