Being a real estate investor can be a big responsibility. If you buy a property alone, you could be left doing all of the work managing it.
You're not alone, as 70% of rental properties in the United States are owned by individual investors.
First-time landlords may be wondering how they can settle into this role. This guide will give you some tips.
Know Your Market
The first thing that you're going to want to do is make sure that you keep track of the latest market trends. This is because the market trends will give you a good idea of what you can charge for rent.
For example, you're not going to be able to charge the same rent in New Hampshire that you would in Boston. In New Hampshire, the average rent is around $1,950 per month.
Knowing this, you should be charging around this much in rent. There will be other variables such as what neighborhood your apartment building is in, how big the apartment is, what the condition of the apartment is, and more.
Regardless, you can still get a good idea of what you can charge in rent by doing a little market research.
Have an Emergency Fund
If you're going to invest in real estate, you need to treat this like it is your business. Part of operating a business is making sure that you have an emergency fund.
Over the course of your ownership, you're likely going to run into a large and unexpected expense. This can be anything from a maintenance nightmare to bad tenants, a possible lawsuit, more vacancies than you expected, and more.
As a real estate investor, you need to be prepared for anything that gets thrown your way. Having an emergency fund can help you weather those storms.
Before you allow a tenant to live in one of your apartments, make sure you do your homework to find out what kind of tenants you're getting paired up with.
What is their credit history? Do they have a criminal record? Do they have proof of income? What does your gut say when you speak to them?
These are all questions that can be answered by not rushing into filling a vacancy. Take the time to interview any potential tenants as well as get their consent to run a background check on them. If everything checks out after that, feel free to move forward with them.
Landlords Can Receive Help
First-time landlords are likely feeling a bit nervous and intimidated about owning a property. However, if you screen your tenants carefully, make sure you have an emergency fund, and do your homework on the market that you invested in, you should be fine.
If that's not enough, there's an option where you can receive some help. You can hire a property management company.
Do you want to know more? Message us here with your questions.