Buying and investing in real estate is not for the faint of heart. But, that doesn’t mean you should shy away from it if this is one of the first times you’ve decided to purchase an investment property. It’s important to know all of the details, concerns, and risks involved before pulling the trigger. Because we help buyers more than sellers, we are very familiar with the ins and outs of real estate investing. We’ve talked to many different investors and these are the most concerning thoughts and issues that come along with the real estate game.
#1. Buying the wrong property.
Of course, this is a concern. Not only do you have to worry about buying the right property but you have to estimate and predict how that property will give you the return you need over the next few years. It’s not just about the property but the location, the price, the neighborhood, taxes, and everything that is involved with buying a property. Look into future improvements for the area, the infrastructure, the location, the ease of conveniences, and a number of rental properties in that area currently. All of these can factor in when it comes to buying the right property.
#2. Local rental demand.
The last thing you want on an investment property is for it to sit vacant. You need that property filled and consistently taken care of. If there is a high number of properties available in the area, it’s a good indication that there may be an abundance of supply, which means that your rental property may not get rented out either. If there is a little amount of rental supply to the area, and most properties are either rented out or owned, it’s a good indication that it’s a good location for a rental property.
[Read More: Buying Advice from Real Home Buyers]
#3. Maintaining the property.
If you are buying a rental property in the same town in which you live, it’s fairly easy to maintain the property and keep it up-to-date. However, if you are buying a property outside of your location or even in another city or state, you may need to look into hiring a property manager. If that’s the case, you’ll need to factor in the cost of that property manager to make sure that you’re still making money on the property. You’ll need to maintain any issues that come along, appliance repair or replacement, landscaping and if you’re planning on paying for any of the utilities.
#4. Getting the wrong tenant.
If you’re using a property management company make sure that they are very familiar with their screening process and have a good reputation for getting great renters. If you are doing it yourself, this could be a crapshoot, especially if you’ve never done it before. However, bad tenants can still pop up so you want to ensure your property to cover any damage to the building and its contents and ask your insurance about any rental defaults or damaged by the tenants.
#5. Losing money.
The last thing you want is to lose money on a property that is supposed to earn you money. This is where having the right real estate agent that is familiar with the rental market in your city or location is imperative. Using the right agent, negotiating for the right deal and finding the right home all need to work together in order to have you earn money from your property instead of losing money.
There are many pockets of rental properties throughout Sunset Beach and surrounding communities that are ideal for rental properties and investors. Because we work with buyers on a daily basis we are very well-versed in finding the right property for your needs. By answering a few key questions we can help you find the right home in your budget and for your future needs.
Image adapted by Fitzrie B