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.
Property management company, My Property Man, wants to help you realize your dream of investing in real estate and to make it easier, so they put together the following tips. Keep this advice in mind as you move forward 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. That way, the initial purchase price will likely be low, but the potential of the rental home - including the rental price - will likely go up over time. If you’re looking to invest in and around New York City, understand that the cost of living - and real estate cost - changes according to neighborhood. For example, the median home price in Forest Hills is only $450,000, whereas Long Island City is just under $800,000.
● If you’re considering renting out personal property, look into zoning for renting out structures on your property, like a pool house or mother-in-law space.
● Look for properties conducive to entertaining and high-volume use. Avoid anything too old or in ill repair, or you could be sinking in extra cash. However, if you want to make renovations to the property, MyPropertyMan can help you manage the project, as well as provide consulting and help you coordinate with contractors.
Funding
There are a number of loan options available for investment properties. Your debt-to-income ratio and your credit score will play a role in the type of loan products you qualify for.
● Conventional loans offer the best interest rates and terms and can give you a lower down payment.
● Veterans loans are an option if you meet the requirements.
● If you have retirement savings you’re comfortable tapping, you could self-fund your investment property.
Prepare Your Property
It’s important that your property is in good condition before you open it up for rentals. So take the time to make some repairs and get things in order before you list it to the public.
● Make sure that all of the appliances are in good working order. If something needs to be fixed, look online for nearby appliance repair professionals. You’ll want to read over reviews to find the right person for the job. Once you find a great contact, keep them on hand for future repairs to reduce your stress.
● Ensure there are no pests in the building. Set out traps to be sure. If necessary, call out a pest or fumigation company.
● Prepare some of the cosmetic aspects of the home, like applying fresh paint and cleaning the carpets or floors. These small steps will make a big impression on potential renters. Plus, you’ll know the exact condition of the property, so you can check for damage when the tenet is ready to move out.
● You can also leave this hard work to professionals like MyPropertyMan, which offers tenant turnover services that address things like painting and cleaning, as well as any repairs that need to be handled.
Management
If you’re handy and live locally, you might consider managing your own rental. If not, 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 issues as necessary.
● If you’re renting out a private home over a longer term, you may be comfortable managing the details on your own.
Real estate investment can earn a good return, provided you’re managing your money, and your tenants appropriately. A good real estate agent and lender can help you find the best property at the best price.
Do you have a New York, NY property that you need managed? MyPropertyMan can help take the stress out of being a landlord. Visit us online to learn more about our services and to arrange a consultation to discuss your management needs.
Photo Credit: Kindel Media via Pexels
Author: Katie Conroy