Do you own rental property in Portland, Oregon? Owning rental property has produced some of the wealthiest people on the planet. Accomplishing this goal means that you have to take the necessary steps of acquiring rental property and getting deeply involved in the property management sector. Selecting your first rental property can be a tricky affair but here are a few steps to help you choose your first rental property. Becoming a Residential Real Estate Investor is not as difficult as you may think.
Determine your personal limits
The new landlord must realistically determine their needs and abilities. The best option is to make decisions cautiously as you might prefer to manage your property directly or indirectly. You must decide if it makes sense hiring someone else to handle the management for you. If you intend on maintaining the property by yourself, you will need to consider the distance from where you live from your rental property. Whereas, if you are going to get someone to handle it for you, vicinity will be less of an issue as reputable firms have team members strategically placed and available to serve their customers quickly.
Consider how much money you are willing to invest with. Make a list of favorable amenities you would like, and find a list of properties that has them. Research the location of the properties thoroughly according to your standards, taking into account the quality of the neighborhood as this influences the type of tenants you attract and the retention rate. For example, if you buy property in an area near a student’s facility, higher chances are that your potential tenants will mainly be students and you could face vacancies on a regular basis (i.e., during winter, when students tend to return home, rooms will be unoccupied until the end of summer). Don’t let this be a deterrent – simply adapt your leases to 9 month leases, and change the rent pricing to compensate for 3 months of vacancy! Offer rent incentives for 12 month leases in these areas if you would rather have consistent occupancy; consider 6 month leases with 12 month lease renewals to stagger vacancy times.
Consider what you would like in a tenant, and provide amenities and accommodations to suit those customers. Just remember you cannot violate fair housing, and cannot discriminate even if a potential tenant does not meet your target audience. Follow all the laws, and be mindful of your leasing practices. Fair housing is a major risk and liability for new Landlords who try and manage on their own.
Narrow down your list
Talk to tenants as well as property managers in the neighborhood. Renters will be far more honest about the negative aspects of the area because they have no investment in it. Once set in a particular region, try to visit it multiple times on different days of the week to see your destined neighbors in action. Frequent visiting will help in narrowing down the list of properties you are interested in. Would you live there? Is it loud or quiet, too busy with traffic or is there a good sense of community with neighbors? This will narrow it down to at least 2 or 3 areas that may match your management expectations.
Explore the financial options
Real estate investing doesn’t start with buying a rental property; it begins with creating the financial situation that makes it possible to buy one. When you do locate your ideal rental property, keep your expectations realistic and make sure that your finances are in a healthy state. This ensures that you can wait for the property to start generating cash, rather than depending on it desperately.
Now that you are done selecting some excellent properties, it’s time to explore the financing options as investments may require you to take a mortgage that will favor your annual income calculations.
Consider first your current home! Are you in a position to buy a new home while keeping your old home? Most Landlords get started by making modest purchases and living below their means, and buying to move into something a bit more comfortable, while renting out their old home to continue to build equity. Slow and steady wins the race, and being an investment property owner can have huge rewards if properly managed.
Take action
If you are focused on the property management industry, you will have to purchase the property that favors your parameters, and that also implies to be the best investment. Make sure you always select the best available properties for your budget, after implementing a thorough research and selection process of vetting them. Remember, it’s all about cashflow to maximize your flexibility to properly manage and maintain the investment, and to grow your wealth.