9th December 2019
Wondering if it’s time to buy a rental property? Investing in real estate is a big commitment, and just like any other investment out there, it’s important to really understand it before you dive in. Invest first in your education.
After identifying a market to invest in, look for the right price. Investors generally snap up great bargains. So, you need to be able to act quickly once your target’s in sight.
2. Location, location, location
When choosing a profitable rental property, look for low property taxes, a district with low crime rates, a flourishing job market, schools and plenty of amenities, such as parks, malls, restaurants.
3. Stay local
If you want to rent out properties, don’t buy a house in Prague if you live in Cape Town. Not only will you need to hire a qualified property management firm, but you will also have a difficult time assessing any damages or requests for repairs. However, as you get the hang of real estate investing you don’t have to remain local.
4. Consider risks
In most cases, renting out property is not as simple as getting renters and checking in once a year. Your property could sit empty between renters, lowering your overall return. You also have to consider the additional expenses of maintenance, repairs, emergencies and insurance.
5. Get advice from experts
Real estate agents and financial planners may have a lot to say when you’re in the middle of figuring out what to buy. They will look at your entire financial picture before recommending a range of what to reasonably spend on a first investment.
Rental property investing can be a great wealth-building tool when it’s done the right way. While the appeal of generating a passive monthly income with real estate is high, it’s important to remember that it often requires a lot of work to keep that income flowing.