How to Make Bank on Your Rental Property

How to Make Bank on Your Rental Property

Buying and renting real estate can be a moneymaker when done correctly. If you’re thinking about entering the real estate investment market, there are a number of things to consider before taking the plunge. One of those is actually a legal requirement – forming your business and registering your LLC with the state. A great resource to utilize in this regard is an online formation service, which will walk you through the process and help file all the requisite paperwork. But that’s just the tip of the iceberg.

My Property Man, a trusted property management company, wants to help you realize your dream of investing in real estate. To make it easier, we’ve put together the following tips to guide you as you move toward buying your first rental property.

Location

As the saying goes, in real estate, it’s all about finding the perfect house in the right location.

• If you’re interested in buying a house to use as a rental, look into homes in up-and-coming neighborhoods where people are interested in living. The initial purchase price will likely be lower, but the potential for appreciation—and rental rates—will likely rise over time. For example, the median home price in Forest Hills is about $450,000, whereas Long Island City is just under $800,000.

• If you’re considering renting out personal property, check local zoning for structures like a pool house or mother-in-law suite.

• Look for properties conducive to entertaining and high-volume use. Avoid anything too old or in disrepair, or you could be sinking in extra cash. However, if you do want to make renovations, My Property Man can help you manage the project, provide consulting, and coordinate with contractors.

Funding

There are a number of loan options available for investment properties. Your debt-to-income ratio and credit score will play a role in which loan products you qualify for.

• Conventional loans: Offer the best interest rates and terms, often with lower down payments.

• Veterans loans: An option if you meet eligibility requirements.

• Self-funding: You can use retirement savings if you’re comfortable doing so.

Prepare Your Property

It’s important that your property is in good condition before you open it up for rentals.

• Make sure all appliances are in working order. Find reliable repair professionals and keep them as future contacts.

• Ensure there are no pests. If needed, hire a pest control company.

• Refresh the home cosmetically: apply fresh paint, clean carpets, and sanitize surfaces. This makes a big impression and sets a baseline for property condition.

• You can also leave this work to professionals. Our rental property management services include tenant turnover services such as painting, cleaning, and repairs to keep your units move-in ready.

Management

If you’re handy and live locally, you might consider managing your own rental. If not, hiring a property management company can be a wise investment.

• A property manager like My Property Man will advertise vacancies, screen tenants, secure contracts, collect rent, and handle repairs and emergencies.

• For condo owners, our condo property management services ensure common areas and building maintenance are taken care of professionally.

Final Thoughts

Real estate investment can earn a strong return, provided you manage your money and tenants appropriately. A good real estate agent and lender can help you find the best property at the right price—but having the right property manager ensures your investment continues to grow.

Do you have a New York, NY property that needs management? My Property Man can help take the stress out of being a landlord. Visit us online to learn more about our services and to arrange a consultation.

Photo Credit: Kindel Media via Pexels

Author: Katie Conroy