Becoming a Real Estate Investor is no easy task, there are many courses and classes, here is a quick guide whether you want to dip your toe in the real estate investment pool with a residential rental or buy a full-scale vacation property to market year-round, there are some important considerations to keep in mind. Storage Lookup lists a few below.
Looking to Buy?
If you’re looking for your first investment property, in addition to knowing current home trends, there are different things to consider when it comes to residential versus vacation homes.
- Financing will be key in both cases – you’ll want to ensure you get preapproved for a loan before looking at prospective properties.
- If you’re searching for residential property, you’ll want something centrally located, in close proximity to transportation corridors, neighborhood amenities, and highly rated
- If you’re looking at vacation properties, proximity to attractions is key, as is choosing a destination that has tourist traffic year-round.
Managing a Property
There are a lot of moving parts when it comes to property management – you can do it yourself or hire a management company. There are pros and cons to each approach.
- If you manage a property yourself, you’ll need to market the home, vet tenants, write contracts, collect rents, and troubleshoot any issues that arise.
- If you’re renting a vacation property, you’re likely to have tenants staying for shorter durations, which means you’ll need to clean and restock supplies in-between guests.
- Do you need extra storage equipment and cleaning supplies? Use Storage Lookup to find affordable storage units in your area.
Making a Business
Whether you decide on a residential or vacation investment property, running it is a business, and as such, you should ensure you’re operating like one.
- Get a business license, establish yourself as a limited liability company (LLC) and draft a business and marketing plan.
- Identify key service providers – like a handyman, an accountant, and a cleaning company – you can write off the cost of their services as a tax deduction.
- Create a budget and anticipate the potential for vacancy rates – this will keep you on a financial track.
- Find ways to handle marketing on the cheap; for example, if you advertise on Instagram, an Instagram post maker can make setting up posts and stories super easy.
Being an investment property owner is a good way to generate an income while owning something that will typically appreciate in value over time. Conduct your due diligence so you understand all of the intricacies of running a property rental business.