Property investment is a popular and safe investment choice for many. Real estate is easy to understand and so long as there is a demand for housing, investing in property can have solid growth. Despite being a safe option, real estate is a major move but the beginner’s guide to property investment will navigate the basics.
Find The Right Investment Property
The first step to finding the right investment property is to know: what kind of property to buy, a budget, have a realistic idea of expected income flow, know what area fits the investor profile, and understand the risks. The budget will restrict what neighborhoods to shop in, so with a number in mind, search locations that fit the investment objectives. An ideal location will have in-demand properties from tenants, access to public transportation, a variety of public amenities, and access to employment opportunities. Check neighborhood sales data for property value trends, average days on the market, rental yields, vacancy rates, and auction clearance rates.
The Cost Of Investing
There are several up-front and continued costs of investing in property. When first making a property purchase, expect to pay: a deposit, loan establishment fees, mortgage insurance, utility connections, and an ownership transfer fee. The continual costs of an investment property may occur monthly or annually and vary. Continual costs include insurance, annual mortgage fees, land and government taxes, utilities, repairs, and property management fees.
Responsibilities Of A Landlord
Being a landlord is a full-time responsibility that requires being available for tenants 24/7. When a rental agreement is signed with tenants, they need to pay a security deposit against missing rent payments, property damage, or property misuse. This is also the time to complete a condition report that details the condition of the property at the time of move-in. Include photos with the report as supporting evidence in the event there is a disagreement over damages and the security deposit. Don’t take rent payments via credit card to avoid any payment disputes and always provide tenants with signed and dated receipts when rent is paid.
Landlords are responsible for maintenance and repairs to the property. Urgent repairs like burst water pipes, leaking roofs, gas leaks, and flooding need to be handled immediately. Non-urgent repairs, or those that don’t make the property unsafe in any way, should be handled within an agreed-upon amount of time.
Not all landlords have the skills or know-how to complete all types of home repairs. Taking on a dangerous home repair can quickly end in injury and impact a landlord from being able to work. iSelect allows customers to compare income protection insurance across a range of insurers. Customers can learn the basics and benefits and compare income protection insurance with iSelect.
Managing An Investment Property
Managing an investment property means finding tenants, collecting rent payments, and handling maintenance needs. Property management can be done by oneself or a property manager can be hired. Their goal will be to maximize weekly rental income by finding ideal tenants who will respect the property.
There are a few questions to keep in mind when shopping for a property manager. Find out if the agency has a dedicated property management department, how many years of experience a manager has, how many properties are they currently managing, what is their tenant review process, and what are their fees. Property management agencies usually charge a monthly fee that covers routine tasks like inspections, rent collection, and finding tenants.
Curb appeal is the first impression that attracts tenants to the property and piques their interest to see the rest of the home. Lifescape Colorado landscape architects create and maintain sustainable outdoor spaces that enhance the beauty of any property. Their design-build process saves clients time and money, developing unique designs that fit the style of the clients and property.