Buying an investment property is one of the safest ways to increase wealth over time and securing your financial future.
The best thing about renting your investment property is that it will be providing you monthly cash flow while also generating value from appreciation in the long term.
Renting out your property is also the easiest way to pay your mortgage. Once tenants are paying you rent to live in your property, you will be having someone else pay your mortgage.
Do you want to invest in rental property but not sure where to start? Keep on reading.
1. UNDERSTAND THE MARKET TO CHOOSE THE RIGHT PROPERTY
Investment properties in Florida can be very rewarding if you make the right choice. It is important to choose the right property at the right price and choosing the right time to invest is just as important.
There is seasonal variation in prices and inventory. Market trends also vary from month to month. According to Zillow, in markets like Miami, the optimal buying season tends to be in the early part of the year, when homes usually sell below asking price.
The housing market in South Florida has been booming recently. 2020 was a year marked by low inventory and high prices, not the best time to be buying, however, more homes available for sale are expected in the first quarter of 2022 as well as lower-than-peak prices and less buyer competition for a while just to continue going up in the next years. According to the Florida Chamber of Commerce, Florida’s population is expected to increase by almost 26 million people by 2030.
2. THE PROPERTY’S AGE MATTERS
The older the property, the higher your contingency reserve should be. An advantage of finding an older home to purchase is that most of the times, you will be able to find a better deal depending on the area.
On the other hand, when a property is less than 10 years old, everything from electrical, plumbing, roof and HVAC system should not have serious maintenance issues for several years and you can even rent the unit at a higher price.
3. GIVE YOUR PLACE THE OOMPH IT NEEDS
Getting your property ready to rent is very important. You need to ensure it is in the right condition to be listed on the market, and to stand out. Taking great marketing photos is a must and you want to make your property as photogenic as possible.
There are several inexpensive things you can do to add curb appeal to your property like a fresh coat of paint on the walls, replacing old hardware, adding light fixtures and window treatments. Invest in nice appliances that are functional and will also make the kitchen look modern and clean.
If you will be accepting pets, your tenants will appreciate a nice low-maintenance garden with a fence.
4. CHARGE A LATE FEE
Once your property is ready to rent, you want to keep money coming in every month. To achieve this, it is recommended to charge a late fee when a tenant does not pay the rent on time. Late fees are usually around 3% to 5% of the cost of the rent and they encourage tenants to pay on time.
Don’t forget that if you will be setting a late fee, it is something that should be included in the lease agreement, so tenants are aware of this before signing.
5. HIRE A GREAT PROPERTY MANAGER
A good property manager will have a lease agreement ready, run background checks on every applicant and choose only the best tenants for your property that are more likely to pay their rent on time.
Another advantage of hiring a property manager is that they will be the point of contact for any tenant concerns and take on the day-to-day responsibilities without you having to stress about maintenance, financial reports and rent collection allowing you to free up your time.
Look for a property management company that truly understands the perspective of the landlord and can provide a personalized level of attention to your investment.
If you're thinking about becoming a real estate investor who needs a great property management company in Miami, Florida, we want to meet you. At Pristine Property Management, our team is ready to help you with all of your property needs. Contact us so we can start working together today.