Investing in real estate is a great way to build wealth. With a savvy investment, you’ll be able to make excellent returns with a predictable rental income that appreciates over time. The benefits are many, from passive income to tax advantages. If you’re thinking about investing in real estate for the first time, the best option is to partner up with a professional Rochester NY property management company. Rochester is a great place to invest right now and to get you started we’ve put together some top tips for first-time investors.
Engage the Services of a Professional Management Company
For first-time investors, it's always advisable to engage the services of a professional management company. A reputable Rochester NY property management company will take the headaches out of managing a property portfolio by maintaining and overseeing real estate assets on behalf of the owner.
Using the services of an experienced management company means you can leverage the benefits of owning a rental property without the hassle. The company will help you maximize the profitability of your investment by taking on tasks like:
Setting the correct rental rate
Collecting and depositing rental payments
Advertising effectively
Finding and managing tenants
Accounting and billing
Managing vendor relationships
Ensuring compliance with housing regulations and property laws
Factor In Unexpected Costs
Something that many first-time investors learn is that costs have a way of cropping up when you least expect. That could be anything from basic maintenance to emergency renovations. Failure to plan for these unexpected expenses can take a serious wedge out of your profits, but as long as you plan ahead, there’s nothing to worry about.
Every landlord needs a contingency budget. Ideally, landlords should look to set aside about 30% of their rental income for maintenance-related issues. Maintenance costs are notoriously unpredictable, however. For people new to the game, it can be hard to anticipate potential issues ahead of time so it’s worth setting aside a bit more (50% is just right). Know Your Market Inside Out
It’s super important that you get to know your market inside out and back-to-front. This is what will keep you competitive as a landlord in your area. Make sure that you’re up to date with current trends. This will help you assess the market and forecast for the future.
Key factors to consider: - Interest rates
Average rent prices
Average income
Crime rates
Employment and unemployment rates
All of these factors will impact your ability to find tenants. For example, you may find a cheaper investment property in a high-crime neighborhood, but this is likely to make it harder to find tenants willing to live there. Being informed is key to becoming a successful real estate investor.
Whether you’re just starting to think about a rental investment or ready to make your first purchase, these top tips will get you started on the right path to success. Remember to research your market, budget wisely, and engage the services of a professional Rochester NY property management service. It’s time to put your best foot forward!