The world of real estate is one that is vast and ever-growing.
More often than not, you will know someone who is involved in it; whether it’s your uncle, your friend’s mom, or even your neighbor.
Which may or may not lead you to taking the plunge and getting your own first ever rental property.
If you’re still unsure or hesitant about it, I’m here to give you some tips before officially closing the deal.
After all, you don’t have to be a real estate expert in order to be a property owner.
1. Location, location, location
Ask anyone and they will tell you that location is key. And more than anything else, you have to pick an area and get to know it well.
You don’t have to memorize every single detail about it, but at least know the culture and economy in the neighborhood. This will require a certain amount of research.
Start by using the web with our modern day best friend, Google. After that, you can dig deeper by talking to friends or acquaintances (even a friend of a friend) that live in the vicinity.
If you can’t, pluck up the courage to approach people in the area. From there, you can determine what your target market will be.
Are they mostly working guys and gals? Are they university students? Are they upper middle class families? Choosing your niche is also an important factor to consider.
Don’t forget about accessibility. You don’t want a place that’s in the middle of nowhere. Unless, of course, you intend to put up a weekend getaway sort of rental property.
2. Focus on the Return on Investment (ROI)
There’s nothing like investing in an area that you know for sure has a high return on investment. According to rental expert, Iris Felder, a capitalization (or cap) rate of 7% or greater is ideal.
She also states that you can find great deals in locations that are gentrified or transitioning.
And in connection to the previous tip, you can attain an even higher ROI if you know the area of your potential rental property well.
It’s best to keep a list of pros and cons or rewards versus risks. List down realistically how your expenses will be divided, from property taxes to maintenance and repairs.
3. Inspect your property thoroughly
Channel your inner (real estate) detective and take note of the little details in your possible rental property. Not only by what can be seen with the naked eye, but also its track record or history.
Check out what other places the property developer has built. See if they have a good reputation or a major flaw that simply can’t be ignored.
Once you’ve done that, you can move on to inspecting the physical aspects of the property. You can even hire someone if you want to.
Spotting on the ceilings and walls are a big no-no, for example, because it indicates that there is a problem with the roof or there’s water leaking in the building.
4. Consult with professionals
Real estate experts can most definitely give you sound advice. Even finance or investment experts. Particularly for those who are smart and successful, they can smell bad business a mile away.
If you’re not one of them and you have zero trust in complete strangers, you can always ask a friend who happens to be experienced in the field.
It absolutely helps if you respect and trust the person’s opinion no matter what. Who knows? You may need their advice or guidance in the long-run.
5. Acquaint yourself with the digital world
It’s not hard to see that we live in a world that’s gone mostly digital, everything from job applications to food deliveries. And if you can’t keep up, you might be swallowed whole by it unexpectedly.
Once you’ve picked your rental property and are ready to make that commitment, it’s time that you learn how to advertise or sell it online. There are plenty of sites that will gladly cater to what you need.
Rentpad is one of the great places for that since we keep our listings up to date.
Not only will you be able to promote your property, but you will also find apps that can help you collect rent easier and hassle-free.
So, have you made your final decision?
Most people will tell you that investing in a rental property is a smart decision and it certainly is. But at the end of the day, it’s all up to you.
Whether you think you can handle the amount of responsibility and you’re willing to learn and grow with it.
Here’s to becoming the ultimate landlord and delving deep into the remarkable realm of real estate!