Real estate investing can seem like an easy way to make some money, after all, plenty of people have found it to be very financially rewarding. The thing is, people who find success with it typically do their homework to minimise risks. Find out how you can do the same below!
Find a Good Real Estate Agent
If you’re investing in rental property, the best real estate agent you can find is someone who is also an area investor. Better if your agent can show you some of their properties together with what they are charging for rent. You can also ask your agent for details such as names of other investors they helped. A good real estate agent will either have a team of real estate professionals such as insurance advisers, home inspectors, lawyers, accountants, property manager, and mortgage brokers; or have refutable contacts that can be shared with you.
Think Long and Hard about Location
Real estate is all about location. An area in decline will be a loss in the future no matter how cheap the property is. If big chains such as Home Depot and Tim Hortons are moving in, then that area is either on the way up or is a prime location because big chains use a lot of research before setting up business in any location.
Draw a Partnership Agreement if Investing with Others
Good relations now can turn sour in the future when money is involved. If a real estate partner passes away, loses a job, or ceases to be a friend, problems can ensue later on. With a partnership agreement, what to do in situations like these are decided early on and will help you avoid an expensive mistake later on.
Invest for the Long Term
When you buy and hold real estate for the long term, you can manage expenses and income easier plus plan to pay the mortgage with the income coming in.
Be Careful Who You Rent Out To
Depending on where your property is, renting out homes to students or certain rooms to other people may need to be done with a permit and certain legal parameters in place such as complying with fire code or procuring a license.
Find a Dependable Property Manager
This would be best if you’ll be renting out quite a few properties (more than 3) because when you have a property manager, you can be a bit more relaxed. Property managers handle repairs and minor problems for your rental properties. They also help find tenants for you. Just note that property managers often get 10% of the monthly rent.
Don’t Rush into Leasing Your Property
Evicting a problem tenant can last months so making sure your potential tenants present no issues is paramount. You may have to ask for references and draft a lease agreement several times before both you and your potential tenant reach an agreement.
Being a landlord isn’t guaranteed easy money. You’ll have to ensure that you’ll still have something left after all bills are paid off and the monthly mortgage has been taken care of. When done properly, investing in rental real estate can be very rewarding and will be free from investing mistakes.
Interested in taking your real estate investing to the next level and are looking for a loan? If you own your home, you’re approved in just 24 hours! Apply today!