If you’re looking for a way to supplement your income and increase your net worth, then you may be thinking about investing in real estate. If this is your first time investing in real estate, you should know that profits can be lucrative for savvy property owners. If you are looking to maximize those profits you will need to make sure you follow these steps.
Research Investment Property Ownership
Think that owning an investment property is an easy way to increase your wealth? Well, that may be true in some cases, but there are a few things you need to remember, especially if this will be your first investment property purchase. First of all, you need to be more objective when purchasing a home that will be rented out, and you may also need more cash for a down payment. Securing a loan for an investment property can be much more complicated and expensive than for a primary residence, so keep this added expense in mind.
Find the Right Real Estate Professional
If you would like to begin searching for an investment property, choosing a skilled agent like Kevin Bartlett can help the process go a lot smoother. Because this is such an important and complex process, you should find an agent who deals with real estate full-time, so that you are not left hanging and waiting for prompt assistance and replies.
Make Any Needed Improvements or Repairs
Once you’ve purchased your rental property, you’ll want to take on any tasks or repairs that need to be completed before marketing it to potential renters. If you want to attract more renters to your investment property, try to focus on projects that improve the curb appeal of the home or add convenience for your tenants. You’ll also want to handle any home maintenance projects. For example, you may need to have the home’s gutters cleaned (averages $160-$300) or carpets steam cleaned (expect to pay $.20 to $.40 per square foot).
Decide Rental Agreement Details and Pricing
With your investment property repaired and improved, you are almost ready to list it. Before you do, take some time to research rental agreement terms so that you will know what to include in your own lease contracts. Some pertinent details to add to your agreement include a description of your property as well as the monthly rental price. You should also think about whether you should charge security, pet, or other deposits before you rent out your property. That way, you can include these items in your rental application and lease agreements.
Find an Experienced Property Manager
Did reading through the rental terms listed above cause you some stress? If so, you may want to think about hiring a property management company to take care of rental agreements for you and to ultimately take the guesswork out of renting and managing your home. Property managers can save you a lot of headaches, especially when it comes to dealing with emergency home repairs or missed rental payments. Think about adding this step to your list.
Save All Receipts and Research Tax Credits
Last but most certainly not least, you should know that being a landlord grants you access to lucrative tax credits that can reduce many of the expenses mentioned above. From maintenance costs to property management fees, there are several items you can include in your next tax return to save you a lot of cash and to boost your ROI. You should also check to see whether setting up an LLC will help you save the most on your taxes, and will ultimately make your first investment property more profitable. This can also provide legal protections.
Investing in property can be profitable, so long as you take the right steps. It can also help to have the right real estate professional by your side as you buy your first property.
Kevin Bartlett & Associates is Southwest Florida’s most trusted real estate advisor. To schedule a consultation, call 239-826-1891!