Rental Property…

Owning rental property is challenging and rewarding.  But it’s also not for the feint of heart.  🙂  On the one hand you can get better returns in real estate than you can with many other investment vehicles.  On the other hand, just like any investment, there can be great lows to go along with the great highs.  How can you avoid the lows?

First, know what you are getting in to.  Each rental income range has it’s pluses and minuses.  Vacancies can be longer on the higher end but payment, most times, more stable.  When empty that’s a harder hit to your wallet. Newer properties require less upkeep/maintenance than older properties but that in turn cuts in to your bottom line on a monthly basis. So many things to think about and trade-off for.

Second, avoid functional obsolescence by keeping your property up to date as the months and years roll by.  Little hits here and there keep the property looking better and the tenants happier.  Happy tenants don’t leave and probably take care of the investment house better.  And in the long run, trust me on this, it’s less expensive.

Lastly, SAVE!  Keep a couple thousand in your reserves.  Maybe that’s overstating it if you own the rental property free and clear.  But if you have a mortgage I would recommend always having access to about $1,500 for any emergency repair (very, very, very seldom will you need that much) and at least 90 days worth of mortgage payments.  That should ride out 99% of the storms out there.  Don’t have quite that much but itching to pull the trigger?  Delay.  My best advice to you.

2 Comments

Filed under Real Estate Investing

2 responses to “Rental Property…

  1. very good advice,, especially about having money set aside for unexpected things, which will undoubtedly pop up.

    • weareguns1

      The housing rental market is definitely improving. We own rental properties in both Massachusetts and Florida. In both states, our turnover has diminished and the tenant pool is both increasing and the quality of tenants are improving. Our latest unit which was put on the market on a Friday, was rented in less than one week. The applicant response was terrific. The first day the ad was placed, we received 6 responses of which 3 applicants qualified. By the 5th day, we had 10 qualified applicants. The tenant we selected had both terrific credit scores and recommendations. The driving force for this rental market improvement is the number of multifamily foreclosures which does two things. Each foreclosure reduces the available housing units from the rental market. At the same time, the foreclosures add to the housing demand. So, this is a perfect storm in the rental market, reduced supply AND increased demand. So, now is the perfect time for property investors and first time home buyers to invest in multifamily and apartment buildings while the prices are low. Already, the prices are beginning to creep up so this is a fantastic opportunity…NOW !!!!
      Visit our Blog for more information on Property Management.

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