Given the current economy and housing market, now is as good a time as ever to purchase real estate with the intent of renting. For investors looking to hold on to a property for the long haul, there is great money to be made with the right plan in place. However, nothing is ever a sure-shot. If you plan on picking up a piece of rental housing, be sure to avoid the following mistakes to ensure long-term success:
Don’t assume a cheap deal is a good one. It’s true that there are definitely inexpensive properties out on the market, but don’t be too hasty when deciding to buy one. If the neighborhood or area is deserted and vacant, it won’t be that appealing to future renters and you could run the risk of having your rental go uninhabited. Do some homework about the town, city or neighborhood before you sign the dotted line.
Don’t overlook various costs. Sure, the price is attractive, but have you factored in closing costs? How about maintenance or repair costs? Do the math before buying so you can be sure to not bite off more than you can chew.
Every day your property is empty, you lose money. Avoid any type of extended vacancy in your property. If the property is empty, you aren’t making any money. Between tenants, be sure to clean and repair quickly so that a new one can move in.
Understand that being a landlord is hard work. Don’t assume that you will get to sit back and watch the rent checks flood in. Not only will there be maintenance work to do throughout the year, but you should also have concerns about finding the right tenants to rent the place. If your renters stop paying, it could take weeks or months to properly evict them. Some landlords may even run into issues relating to theft. Properly screen all possible candidates whenever possible.
Don’t assume that owning a rental is the same as owning a home. There are many laws that vary by state that all landlords must abide by. Renters will always make various demands and requests and will definitely take up some of your time. Hiring a property manager is also an option, but with it comes yet another added expense. Make sure you are mentally and financially prepared to take on the task of becoming a landlord.
By being prepared and learning about what it truly takes to become a landlord, you can avoid making one of these common investor mistakes.
CENTURY 21 New Millennium. Smarter. Bolder. Faster.
CENTURY 21 New Millennium, www.c21nm.com, is a full service real estate brokerage company specializing in residential and luxury properties. The Virginia locations are in Alexandria, Centreville, Culpeper, Fredericksburg, Gainesville, McLean, Stafford, and Woodbridge. The Maryland offices are located in Annapolis, Dunkirk, La Plata, Lexington Park and Lusby. Its core services include: mortgage financing, investing, settlement services, property management, property insurance, global relocation assistance, and commercial real estate.