Purchasing a new investment property comes with its own unique set of challenges. Managing a property can also be a huge undertaking, especially if you can’t afford to hire a property manager to help with the job. To help you along the way, we’ve put together a guide that should benefit those who are buying and managing their very first investment properties. From getting a home inspected to building a relationship with your tenants, this list has the tips and tricks you need to successfully establish your new property.
Get a Home Inspection
As you narrow down the list of properties that have caught your eye, it’s worthwhile to get a home inspection on the ones you’re most interested in purchasing. Home inspections, which can range from $300 to $500 depending on the size of the property, allow a professional to take a close look at the building and determine the types of problems that come with it. Some of the issues that could be discovered during a home inspection include roofing problems, plumbing leaks, and inadequate ventilation. Once you’ve made note of these problems, you can either move on to the next property or use them to negotiate a lower price. Alternatively, you could require the seller to improve the conditions before you agree to buy it.
Order an Appraisal
In addition to having a home inspection, you should consider ordering an appraisal. According to Mashvisor.com, a home appraisal is different from a home inspection, as an appraisal focuses on the obvious features such as the square footage and lot size. Appraisals are done by a licensed third party, and it usually costs between $200 to $600 on average. The goal of having an appraisal is to ensure you’re not paying more than what the property is actually worth. By investing in an appraisal, you can ensure that the property you are investing in is worth the money you are willing to put down on it.
Invest in Home Security
Once you purchase your property, it is important to invest in home security. There is a wide range of affordable options that can help keep your home secure. In addition to high-tech devices, you can opt for more low-tech methods such as a prickly bush near windows and increased lighting around the darker areas of the property. An alarm system is a classic addition, but installation can get expensive, and that’s before you add in the price of a monitoring service. If you want to skip the monitoring service altogether, you can install cameras that you can track via apps downloaded to your smartphone or tablet.
Build a Good Relationship With Your Tenant
Having a healthy relationship with your tenants is essential when you’re investing in a rental property. Although you can screen tenants to help you weed out any potential troublemakers it’s up to the landlord to help create a respectful and friendly atmosphere. By respecting their privacy and listening to their concerns, they will be more willing to keep the property in good condition and let you know when there is a problem.
Get Your Revenue Stream Flowing…
Of course, the first step to getting that rental revenue flowing is creating a legal business entity. Not much to it really — you’re just notifying the state of the formation of a new business. LLCs — as a structure — offer more protections and flexibility for your new empire. With your business now officially “started” in the eyes of the law you can move on to setting up a business bank account. That account will help you keep your personal and business funds separate — as well as give you a spot for the funds you’ll need to actually make the purchase and pay for any needed repairs and updates.
The process for investing in a property may be long and tiresome, but it can be fruitful as well. Be prepared by understanding much you are investing in a property before you close on the deal, which can help you prepare for the next part of this journey. By investing in both the security and your tenants, your property will blossom for many years to come.
When you’re ready to find your first investment property, get in touch with the 2Halls Property Team by visiting our website or calling (210) 835-6007.