Considering purchasing a rental property? Time, down payments, and ROI are just a few pieces of the investment property puzzle. There are some other considerations to think about that are often overlooked. A property purchase is a major investment, so don’t be afraid to take plenty of time to do your research and consider all important factors before signing a loan.
Evaluate The Location
Location, location, location! It’s easy to scroll through real estate listings and note property features you like and dislike. For real estate investors, it’s even more important to evaluate properties for their location. Two similar properties can rent for massively different prices and generate higher profits based on location.
A few factors to consider:
- Proximity to other buildings
- Availability of public transportation
- Proximity to amenities like stores, parks, etc.
- Quality of school districts
- Are there thriving businesses and economic development
- What is the crime rate
Choose the Right Financing Option
First-time real estate investors need to have a thorough understanding of finances and mortgage options to make smart investment decisions. Make sure you research all of the best options for financing an investment property and carefully select the right mortgage. Getting the right mortgage can set you up for success, keep your carrying costs low, maximize cash flow, and help you stay prepared for unexpected repairs or further investments.
Buy A Turn-Key Property
One of the biggest mistakes that new real estate investors make is buying a “fixer-upper.” If the ad says the property “needs some TLC,” just move on to the next listing. There are few worse feelings than realizing that your cash cow is actually a money pit.
The exception to this rule is, of course, if you’re knowledgeable about home repairs. If you have extensive handyman skills (or know someone who does), you may be able to deal with these extensive repairs economically and still turn a nice profit. But as a general rule, it’s going to be less of a headache to just purchase a house that’s already in workable condition, so do your best to resist the allure of a property that is a bargain but needs a lot of work.
Should You Hire A Property Management Company?
You need to decide whether you want to handle property repairs, tenant management and maintenance yourself or if you’ll hire a property management company such as Walters Property Management Company to manage the daily maintenance and tenant services on your behalf.
Property management companies will handle scheduled and emergency repair calls. They can also screen applicants, collect rent on your behalf and offer tenant placement services and eviction processing for an additional fee. In exchange, the property management company takes a percentage of your monthly rent. If you live far away from your property or don’t have the time to manage the maintenance of your property, hiring a property management company is a great choice.
If you’re thinking about buying an investment property, Walters & Company Property Management is here to help. We have a reputation for meeting and exceeding expectations, and we are leaders in the Denver property management field and offer top-notch rental properties in highly coveted areas and we’re always happy to talk more about our services that will help you make your investment a success.