Guest post from Natalie Jones at Home Owners Bliss
How to Make Your Investment Property a Truly Successful Investment
Investment property is exactly that—an investment. And like all investments, you will want to make sure that it brings great returns for it to be a worthwhile one. An almost surefire way to do so is to turn the property into a rental. This can be either short or long term, with the former geared toward tourists and the latter pertaining to residential tenants. Either way, renting out your investment property guarantees extra cash flow, as long as it has a good occupancy rate. So yes, real work is involved if you want to succeed in this venture. Let’s take a closer look at what it entails.
Choose the right property.
For as long as the world has had realtors, the importance of location (as well as knowing approximately how much you’ll pay for properties in Montebello) has been emphasized. This is especially important for investment properties as tenants are more compelled to rent a property based on convenience. Short-term renters like vacationers will likely look for proximity to local sights and attractions, as well as food and shopping establishments. Long-term tenants, on the other hand, will be more likely to go for a rental that’s accessible to schools, business districts, public transportation, and more.
With these factors in mind, it’s definitely essential to figure out right off the bat what kind of rental you’re going for and choose a convenient location accordingly. Moreover, you’ll also want to get a feel of the neighborhood, too, in everything from safety and rental rates to have a basis from which to structure your rental.
Get a home inspection.
While many homes can be profitable investments, beware of the fixer-upper as this can be more trouble than it’s worth. As a rule, make sure that there’s a home inspection contingency clause in your initial agreement and definitely make use of it. While this might be an out-of-pocket cost to you, it’s a real necessity if you want to make sure that you’re making a good investment, so don’t skip this step.
Among the things a home inspection (which typically costs $300 to $500) will look at is the house’s HVAC system. Know that fixing or installing central AC can be quite expensive. This figure varies, though, depending on the size of the AC unit and the materials needed on the job, as well as project difficulty and labor costs for extraneous tasks like getting rid of the existing system. With this in mind, if your home inspection report details a problem with the central AC, it’s undoubtedly in your best interest to negotiate with the seller for either a reduction on the property’s sale price or that they get it fixed first before closing the deal.
Make improvements.
With repairs done and the deal closed, it’s time to really create your rental. Most of the time, this will entail some nice interior decorating. For more dated properties, however, you may also need to put some effort into home improvements to make the rental attractive to prospective tenants. Generally, the kitchen and bathroom bear the brunt, as appliances and fixtures need to be updated and changed to fit current design trends. It’s also a good idea to find out what tenants look for in a rental to see how you can improve your property, both inside and outside.
Get it listed.
Finally, when your rental is good and ready, you will want to get it out there right away so it can start generating income from tenants. This will entail getting it listed on the appropriate platforms, as well as marketing it to make it stand out from the competition. You can also look into hiring a property manager as they generally take care of all rental tasks, which can be very helpful if you’re busy and unable to give it your full attention.
Ultimately, your investment property will work for you and bring you the promised returns, but only if you take measures to set it up for success. So start by educating yourself on the process and taking each step as they come. You’re on the right track!
For real estate loan options, be sure to connect with the experts at Outside the Box Capital.
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