Tuesday, 28 March 2017

8 Things You Need to Get Started With Your New Real Estate Property

Written by Posted On Wednesday, 27 July 2016 16:49

 

You did it. You bought a great property that’s going to increase your passive income and net worth for years to come… or so the thought goes. In reality, managing real estate can be costly, not to mention stressful. Many investors become discouraged with all the details: fixing up the property, finding reliable tenants, dealing with tenants who destroy your property, and getting money from those who pay late or those who don’t pay at all. If not properly managed and secured, your real estate can become a money pit. But take heart! There are some things you can do that will not only minimize your stress, but also protect your investment. Here are eight to consider when getting started with your new real estate property.

 

  1. Paperwork. The rental contract is your friend. You want to be clear about what is expected of your tenants and what you, as the landlord, will provide. Will pets be allowed? How many occupants are expected at your property? How much is the deposit? How much notice does the tenant need to give when they need to move? What is the penalty for a late payment? There are a lot of questions the rental contract should spell out. If you want to have an attorney draw this up for you, that’s fine, but there are also a lot of forms already on the web that are completely free.

  2. A management firm. Yes, you could do it all yourself, but do you really want to? How much time are you willing to spend on the property? If you’d rather spend the weekend with your family than fixing a leaky toilet, consider hiring a property management firm. It does cost, but your sanity may be worth it.

  3. Cash reserve. Something is going to happen. Eventually, anyway. You’ll get the tenant from Hell, be in the path of a hurricane, or fight hornets taking residence in your siding. You’ll give yourself peace of mind if you’re able to fix these disasters immediately. Zillow recommends having three to six months worth of mortgage payments built up to be able to offset any challenges.

  4. Home warranty. This is a great tip for new property owners. What is it, you ask? Landlordology defines a home warranty as “a contract to provide repair and/or replacement services for major appliances and home systems that fail due to normal wear and tear.” A busted dryer belt? Fixed. A broken sprinkler pipe? They'll cover that too. Read more about home warranties here.

  5. Mentor. Find someone who has done this before. They will have experienced just about everything you will soon be going through. They will be able to give you advice on what has worked in the past. And, if they have done it long enough, they may even know how to stay in the business and make money at it.

  6. Relationship with neighbors. Visit the neighborhood. Introduce yourself to the neighbors, especially those who are permanent residents. They can be helpful in a lot of different ways, from letting you know if something fishy is going on with your tenant to splitting the cost of a fence. They’re interested in keeping the neighborhood a safe, beautiful place to live and are usually willing to help you do the same. Building the relationship with neighbors is one of the easiest, cheapest things you can do to secure your real estate.

  7. Security. Though building a relationship with the neighbors is a great idea, nothing can replace real estate surveillance security. Securing your real estate is key to protecting your investment and your tenants. There are a lot of options as far as what you can install or what services you can hire out, but one thing is sure: Make sure you have a plan in place for your real estate security!

  8. Patience. You’re new and being a landlord can be hard. Be patient with yourself, your new tenants, and all of the challenges that come with managing a property. You can do this!

Rate this item
(0 votes)
Login to post comments

From buying and selling advice for consumers to money-making tips for Agents, our content, updated daily, has made Realty Times® a must-read, and see, for anyone involved in Real Estate.