Are You Ready to Own a Rental Property?

Fort Collins CO Real estate investment is a challenging business and should be treated as such. Just like any investment, there are risks involved. But when done right, investing in real estate by owning rental property can be a great way to build a retirement portfolio, save for college, and maintain a steady source of income.

Are you ready to own a rental property? Here are some necessary steps to consider before you take the plunge:

#1 Have a plan
Before you start anything else, sit down and write out a physical plan for your investment future. What are your goals for real estate investing? Do not go forward without an idea of how you will tackle each step.

#2 Get finances in order
The best option for purchasing property is to use cash. Of course, it’s possible to be successful even with a loan, but seeing the profit may take a little longer.
There are options when it comes to financing, including owner occupant loans, non-owner occupant loans, working with an online lender, or a local bank. Don’t forget to add any additional fees associated with your loan. Lenders will also check your credit score and debt to income ratio.
Realtormag.com predicts that in 2015, the rental market will remain a “landlord’s market”. Although there are differing opinions regarding the real estate market from year to year, there are always possibilities for success, even in the lean years.

#3 Research
Find out about your local building regulations. Are your buildings up-to-code?Do your homework and seek out information on inspection requirements, taxes, and compliance rules. Ask about fees and laws, and get a copy in writing.
What neighborhood are you going to invest in? How much rent should you charge? Will you charge enough to keep profits high and cover expenses? What type of investment interests you? Understanding the requirements ahead of time will help to save you headaches later on.

#4 Learn to Stay Connected
Return calls and emails as soon as possible. Follow through on commitments. Is your business important to you? Let people know by your actions. Real estate is all about dealing with people-buyers, agents, contractors, bankers, appraisers, and the list goes on. Connect and learn from others. Find a mentor, preferably someone who has experience in rental investing.

#5 Mr. (and  Mrs.) Fix-It
Landlords can save big money by taking care of certain maintenance jobs on their rented properties. If you are forced to hire someone every time a toilet leaks, you may see your profit quickly flushed as well. How are you with light plumbing jobs, landscaping, and common DIY projects? Can you handle calls late at night for repairs?

If you take the right steps, owning rental property could turn out to be a great investment for you. Stay committed to the process and make smart choices, and you may soon find yourself in the real estate investment business!