how to start, check out these five tips for beginners.
Want to Buy a Home? Search All Homes
Today we wanted to provide you with five quick tips for starting out as a real estate investor.
1. Know what you need to build a good team. You need to have an experienced real estate agent and a good property manager who work together closely, and it’s a great idea to have a few contractors in your contacts.
Your agent will have access to a number of different investment properties, and they need to understand your goals. Be sure to interview them to make sure they know the ins and outs of real estate investments and will stay within your parameters. A property manager provides a number of services, like screening tenants and taking care of repairs. They need to work in tandem, allowing your agent to refer to your property manager to see what projected rents could be like, and so on.
You’ll also need a good attorney who can be in your back pocket in case of issues with tenants or if you need a lease reviewed.
2. Know your goals for real estate investing. Ultimately, what you want is a return on the money you put down to get the investment property. It’s also a good idea to brush up your knowledge of cap rates and cash-on-cash return, which we’ll discuss in more detail in a later video.
Whatever your goals are, communicate them with your property managers so they understand how that property needs to perform and what your expectations are.
3. Plan for a capital expenditure. Supposing your property will need a new roof in five years, you’ll need to have a plan for tackling that project. You don’t want to get hit with some major issue years down the road without having a plan or budget in place for that scenario.
4. Interview your property managers. Don’t settle for the one with the cheapest fees—you need to look at the properties they manage, find out how they manage their properties, and make sure they’re able to work within your requirements. Interviewing more than one will give you the best perspective on who will be a good fit for you.
5. Join a landlord association. Even if you’re not managing your own properties, it’s important to be a part of your local landlord association so that you can stay on top of industry changes.
If you have any questions for us or would like to see a video about a particular topic, please reach out to us. We’d be glad to speak with you.