If you’ve just purchased a rental property, congratulations! It’s a sound investment that many people have seen a lot of success from, some even able to earn a secondary income and purchase more properties. However, investing in a rental property can be scary, especially since there’s some level of risk involved with any type of investment. Fortunately, there are a few things that you can do to make sure that you’ll see a return on your investment. Here are three tips to follow to help you become a successful real estate investor.
#1: Know How to Market Your Property
In the business world, marketing is everything and most marketing occurs online, and while some digital marketing strategies are not cheap, they are well worth the investment. If you want your property to have the greatest chance of being rented, you have to know what your tenants are looking for. Now the needs of your tenants will differ, depending on the type of property you’ve purchased. For example, if you’ve purchased a vacation rental, you’ll want your property to give your tenants all the luxuries and necessities of a home, such as fast wifi, cable TV and/or access to streaming services, etc. When it comes to commercial rental properties, you’ll also want to have high-speed internet, but you’ll highlight other things in your listing, such as office space, how much traffic comes through the area, etc.
Creating an eye-catching listing for residential property also requires you to know what future tenants may be looking for. I’m addition to listing the number of bedrooms and bathrooms, consider what other things future tenants may be looking for. This could be something like a full kitchen (as opposed to a kitchenette) or newly installed hardwood and laminate floors (perfect for those with pets).
#2: Be a Responsible Landlord
As the landlord of your rental property, a lot of responsibility will fall on your shoulders. One of the biggest responsibilities you’ll have is to find trustworthy tenants to rent your property. You don’t want just anyone renting your property, so it’s important to run tenant screenings, which may require you to run a credit check on prospective tenants. A good tenant will pay their rent on time and will respect your property.
At the same time, you must also be a responsive and respectful landlord. Appliances tend to break down; as the landlord, it’s your responsibility to see that it gets fixed, whether you pay to have it fixed or you take the costs out of your tenants’ rent if they have it fixed— depending on what terms you and the tenant(s) have agreed to. You must also keep an open line of communication between you and your tenant(s). If landlord responsibilities are too much for you (and they can be), then it’s perfectly fine to hire a property manager to help you out. Just keep in mind that hiring a property manager is an extra expense on your part.
Because it’s possible to earn a steady stream of income from rental properties, it’s a good idea to keep investing in real estate. You can choose to partner with a lending company or use what you’ve earned from past properties to purchase new ones. You can also diversify your investment portfolio by investing in different types of properties. There’s commercial real estate (hotels, restaurants, malls, warehouses, and office buildings), residential real estate (single-family homes, duplexes, etc.), mixed-use properties (apartment complexes), vacation rentals, and raw land.
Investing in real estate is a great way to earn passive income, whether it’s your secondary source of income or your main source of income. Just do your research before you begin investing so that you’ll know exactly what you’re getting into. It will take a good bit of money up front and a lot of responsibility, but many people have made a successful career out of investing in rental properties.