Most investors look back at their experience and think about the things they wish they knew before they began investing in real estate. What you should first realize is that investing in a home that you plan to put on the rental market can provide financial independence while giving you a passive income. There are some key points to consider when you want to start investing in rental properties.
How to Invest in a Rental Property
When you’re looking for the right rental property to buy, you have to consider location. Take a look at the schools in the area, the crime statistics, and how the job market performs. You also want to know what kind of amenities are nearby, and whether there’s an HOA or a condo association. Those might include special assessments. Look at the number of vacancies in the area and find out why they have been vacant. Get some comparables so you’ll know how much rent you can charge, and make sure to have a professional inspection conducted.
The Costs of Investing in Real Estate
What you pay and what you’ll earn depends on what you buy. You’ll need to decide between a single family home and a condominium. Typically, the nicer and more expensive homes have less turnover and fewer costs than lower end areas. Measure your appreciation against your anticipated cash flow and don’t over-pay for your property. Factor in maintenance costs as well. You should allocate at least two percent annually for repairs.
Investing in Florida: Property Management
Managing your property is one of the most important parts of investing in rental homes. You’ll need a professional management company that can handle leasing, marketing, screening tenants, and collecting rent. Make sure you hire a company with a lot of experience. Don’t go crazy on rehab costs, and make sure you factor in mortgage, taxes, insurance, HOA fees and maintenance costs to get an idea of what you’ll spend annually on your property. For details like these, a good property manager is worth their weight in gold.
If you have any questions about investing or property management in Orlando, please contact us at Hampton & Hampton Management and Leasing. We would be happy to help you with your rental property investing.