Owning a real estate rental property investment is one of the most time-tested ways to build wealth and generate income.
Here are three things to consider when buying a rental property investment.
A Rental Property Investment Isn’t Your Home
Many beginning real estate investors make the mistake of buying a rental property investment the same way they would buy a home to live in themselves.
They focus more on the amenities- lush backyard, high-end fixtures & appliances, and a swimming pool – than looking at the property as a business. True, items like these will attract tenants. But they will also be more expensive to maintain, repair, and replace when damaged beyond repair.
Experienced rental property real estate investors prefer to buy a basic home with minimal upgrades and amenities. Doing this allows for a quicker turn between tenants and less expensive repairs when needed.
Go Where The Renters Are
An easy way to determine where to buy a rental property investment is to buy in areas where there are already apartments or smaller multi family dwellings.
While doing this might sound like common sense, it’s surprising how many beginning investors in real estate don’t do this.
Apartment building developers & property managers have already done the heavy lifting. They’ve figured out where the renters are and what the market rents are for the area. Rather than reinventing the wheel, savvy smaller rental real estate investors simply adapt to what the big players have already done.
Treat Your Rental Property Investment Like A Business
As a small real estate investor it’s very easy to get caught up in tenant drama.
Remember, the tenant is your customer and not your friend. You’re providing a nice place for them to live. In exchange you expect the monthly rent to be paid in full and on time, each and every month, and the property to be well kept.
Experienced real estate investors know that once they allow a tenant to pay the rent late it will quickly become the norm and not the exception.