If you’re a rental property owner, you already know that working in real estate can be really hard, time-consuming work. And it can be risky.
But there are advantages too: it can be a worthu investment over the long-term if you educate yourself and make smart decisions throughout the buying and renting process.
Here are some tips for being successful in the property ownership field.
Seek Properties With Positive Cash Flow
Many investors make the mistake of buying properties that have low returns on investment and are cash-flow negative. It’s important to be careful of buying into bad deals like this, as you’ll find yourself continually investing more money each month for nothing in return—which, depending on how bad the deal was, can potentially continue for decades!
Instead, look for properties that are cash-flow positive. The cost of rent minus your expenses, including mortgage, should leave you with with money left over for profit.
Abandon the dream that there are get-rich-quick methods in real estate. It’s just not the case. Use the old rule of if it sounds too good to be true, it is.
Purchasing decent quality properties and holding onto them over time is the key, as you’ll likely be getting the best equity over the longterm.
Focus on Good Quality Property
Put in the effort from the beginning to find real estate in good living areas with low crime, amenity attractions like shops and parks, and good schools. If the property has investment returns and positive cash-flow plus good tenants with good credit, you’re doing well.
And although all property will need electrical and plumbing maintenance sometimes, plus carpeting and painting touchups, generally look for properties in decent shape overall. You might even consider hiring a property manager to take on the task of managing over time. If you’re willing to invest a little more work initially to make your properties look great, you’ll be looking at higher rent and higher quality tenant applicants to choose from.