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3 Pros You Need Before You Buy Your First Investment Property
Updated: Jan 18
Are you thinking about buying your first rental property? Buying the right investment property is the best way to maximize your profits. Even in scary times like now, you can still be proactive with investing by buying one now and getting it fixed up for renters, so that they can move in at a safer time.
Still, there are some additional steps you should take in order to ensure your first real estate investment is a smart one. Those steps revolve around hiring the right pros, such as Tverdov Housing, to facilitate this often stressful process. So before you commit to your first rental home, be sure to do the following:
How to Start Your Rental Biz
While seeking out pros for your investment is a wise step, building out your rental empire with the proper protection and flexibility for the future is equally important. Before you invest time in finding the right property and pros to help you with your investment, decide which business structure would be beneficial to you. An LLC, for example, can provide you with personal liability protection and provide some added tax benefits as well. To make the process of forming a New Jersey LLC easier, go with an online service. The next important step, of course, is finding the right property and networking with companies in the area that can produce leads for future properties.
Invest in Hiring an Experienced Property Manager
For novice landlords, managing a rental can be very stressful. Therefore, it’s a good idea to consider hiring help, especially if you’re not aware of all the aspects of handling the investment. With the right property manager, like Tverdov Housing, you can get the most profit out of your investment and also avoid most headaches that come with self-management, like screening potential tenants, collecting rent and dealing with maintenance issues. Keep track of any property management fees you pay throughout the year, so you can take available tax deductions. Property management fees qualify as professional fees, but other deductions apply as well.
Work With a Knowledgeable Local Real Estate Professional
Before you can start charging rent and hiring a property manager, you need to find the right rental property. Buying an investment property takes a lot of research and effort to find a home that will be profitable for you and popular with renters. You could spend hours doing that research on your own, or you could leave the hard work up to an experienced local realtor. Hiring a buyer’s agent is paramount for inexperienced home buyers, and the right agent can provide priceless advice on the local market and any steps involved with acquiring a lucrative investment property. Be sure to ask about area and neighborhood data that can help you choose the best location, such as school ratings and median home prices. These numbers can be solid indicators for profitability and can also help you come up with a good financial plan for buying your investment property, which should include market research and gathering financial documents. Getting approved for financing on a second home can take more credit and a larger down payment, so make sure you are aware of the steps needed to find the right funding source.
Connect With Experienced and Licensed Local Contractors
If you’re looking for a good deal on your first investment property, chances are you will be looking at some fixer-uppers. These types of homes are fairly popular with real estate investors, because although they come with a need for upgrades, such as remodeling kitchens and repairing roofs, they also tend to come with lower price tags. You will want to have potential properties thoroughly inspected before committing to an offer, and you will also want to start researching local contractors. Checking reviews and using online searches early on will give you more time to interview contractors until you find the right pro for your remodeling projects. With more time, you can also attract competitive estimates and bids on property repairs and updates, so you can make even more in profits from your investment. Bids will give you a fixed price for your project, making things more simple for new investors, while estimates provide more cost detail, which can be helpful for those who prefer more control. Even if you don’t go with a fixer-upper, making the right upgrades to your rental can help attract more potential tenants, so having reliable contractors from the start is a really smart move.
Investing in a rental property is no small undertaking. If you’re a first-time buyer, you definitely shouldn’t go it alone. So make sure to find the right professionals, who can guide you through the process and help boost your profits.
Article written by Katie Conroy
Photo Credit: Pexels