The thing about investment properties is that they sound like a great idea, and they are. Making a profit while someone else pays down your mortgage sounds simple. However, if executed poorly, you may find yourself wishing you kept your money in your bank account earning less than 1% interest.
I assist homeowners find investment properties regularly and even own a couple myself. Here are a few things I’ve learned through my own, and my clients, experiences.
Due Diligence: Yes, you may expect to renovate the property, but that isn’t an excuse for not performing inspections and identifying exactly what is wrong with the property. Foundation, roof, and plumbing are areas that I pay special attention to and are normally the most costly.
Don’t Over Do It: It’s an investment property. The purpose of it is to provide financial security and passive income. You’re not recreating the Vatican.
Know Your Competition: What amenities do they provide? How much do they charge? Knowing this will let you know where your property stands amongst the competition and if there is anything you need to do to bring it up to par.
Perform ALL Fixes Before Moving A Tenant In: I have seen it many times with inexperienced investment property owners. They purchase a property, move a tenant in, and assume that it’s acceptable to fix items while a tenant is living in the home. You do two things by fixing all issues on/in the property before moving a tenant in:
Provide a pleasant living experience for your tenant. This will often result in a tenant renewing their lease.
Provide a stress free experience for you during the tenants lease term.
Don’t Be A Slumlord: Homes need to be maintained. Money will be spent. But that’s what your profit is for.
Yohannes Gebrekidan | Alliance Bay Realty | Your Neighborhood Realtor
