Enjoy Financial Success with Your First Investment Property
Article Written by Kris Louis
Are you thinking of trying your hand at running or owning an investment property? Or maybe you’re a working parent looking for new ways to boost your portfolio. Whatever your circumstance, if you’re up for a new venture, Real Estate Comps Today hopes these resources will guide you toward success!
Trends and Target Markets
To find the right investment property, learn about the market trends and statistics in the area you are interested in investing, like Huntsville, Utah (where Real Estate Comps Today main offices are based). Currently, the median list price for homes here is over $1.9 million, but because homes are staying on the market for nearly four months before selling, you can likely negotiate a lower price.
You’ll need to identify your target market for your rental property in order to successfully market it. Buildium advises you should visualize your ideal demographic, find out what renters like about your area, and adopt a personalized marketing approach.
Research what travelers want from their vacation rental properties and make sure your property follows suit. In general, travelers are looking for units that offer more space than hotel rooms, are in locations close to tourist attractions, and are clean and quiet.
Even apartments can make great investments. Look for properties with high-end amenities, such as gyms and co-working spaces, to attract the most renters.
Search for a Property
Look for a real estate agent with experience in helping buyers purchase investment properties. The right agent will be familiar with local rental rates, help you understand what your ROI will be, and have access to off-market listings.
Understand the true value of what potential rental properties will bring you. Your real estate agent can help you make a sales comparison approach, which is “a comparison of similar homes that have sold or rented locally over a given time period,” according to Investopedia.
Don’t forget the number one rule of real estate: location, location, location! Your best bet for success is to choose a property in an area close to local hotspots and with great curb appeal.
Finances and Ongoing Profitability
It can be tricky to know how to be fiscally responsible when purchasing a second property. Use these finance-savvy tips to simplify real estate investing.
When deciding on a rental rate, be up to date on current rental prices for properties similar to yours. Setting your price too high will encourage renters to look for other listings, while setting it too low can make them wonder if there is something less desirable about your property than similar rentals in your area.
Whether you’ll be renting your property to short- or long-term lessess, make sure you screen potential tenants to ensure they won’t damage your home and that you’ll receive your payments in full and on time.
Learn the Business Side
Many property investors start a business entity for their venture. Before you create your company, know the legal requirements for doing so.
Investment property owners often choose an LLC structure for their business because this type of entity protects your assets, offers tax benefits, and provides you anonymity.
There are unique requirements for starting a Utah LLC, but using an online service can simplify the process so you can start renting your property as quickly as possible.
Be sure you’re well-versed in federal and local landlord-tenant laws.
Put Professionalism First
To earn high customer ratings and keep renters coming to your property, make sure you’re a courteous, by-the-book landlord.
Working with a property management company can take a lot off your plate, but make sure to weigh the pros and cons before going this route.
If you’ll be your own property manager, there are free software services that can help you.
Market your rental property like a pro by asking customers for referrals, only listing your home as available when it’s show-ready, and tracking how renters heard about your space.
If you’re ready for the world of investment properties, it’s an opportunity worth taking. Trends are strongly in your favor no matter what direction you go, as long as you finance appropriately, put professionalism first, and select your property well. With these tools and tips at your disposal, in addition to comprehensive comps reports through Real Estate Comps Today, you’re sure to enjoy success right from the start!