Real estate has always been, and will always be, somewhere you can successfully invest your money. There are countless options, and for every budget; it’s a space for growth, opportunity, and prosperity. However, like with most things in life; it can go pretty wrong, quickly.
Therefore, whether the landlord’s life is something you’re just thinking about, or you’re onto property number three (congrats); it’s always worth stepping back and accessing each process and part of the role. It’s crucial to understand the market, specifically your market. And, you’ll need to remain the best you can be at what you do, actually; there’s always room for improvement.
This might be something you’re just stepping foot into, or you might want to expand your portfolio and income, as it’s a full-time role for you. However, you’re approaching your real estate ambitions; it’s time to ensure every bit of your plan is on point so that you can go from strength to strength. The following are some areas you might want to look at, in order to boost your real estate prosperity and become the best in the business when it comes to being a landlord.
Location Over Everything
It might sound pretty obvious; however, whether you’re after your first, or second-plus property, it can be easy to be enticed by what may look like an incredible property bargain.
There will always be a house or apartment that offers a specific number of bedrooms and bathrooms, that just looks too good to be true regarding the price tag. Sadly, this is a reminder that it probably is, and there’ll be a reason why it’s on the market for what looks like an incredible price.
Often, it comes down to the location. Whenever, or wherever, you’re looking for homes for sale; judge the location, before anything else. You could buy the most beautiful, fresh new house that you want to market to family renters. But, if it’s in a location without decent schools, stores, transport, and other amenities that your target market prioritizes, it’ll sit there, empty, as you pay the mortgage.
Therefore, it should be your priority that the location of your next investment is ticking off every desirable point on your target audience’s list. You’re far better off investing in a property that needs some work done to it but resides in a great area, than putting your money into a home that is an immaculate building that sits in an unappealing neighborhood.
If you’re a beginner; it’s worth sticking to areas that you know well. Understanding who wants to rent in an area, and knowing the amenities a location can offer renters, is the best way to approach the real estate market.
Knowledge is power, and if you already have lived experience of a location; you’ll start ahead of the game. Local information and little tips are also really appealing when showing a property to your potential tenants; so it’s worth giving yourself that head starts and building some trust before anything’s even been signed.
Your Target Market Niche
Much like the knowledge and understanding, you’ll need to successfully invest in a particular area; having a target market niche regarding your potential tenants, is another crucial aspect to being, or becoming, a landlord.
Therefore, this needs to be something you can hone and nail down as soon as possible. You’ll have in-depth knowledge of the area your investment property resides in; now, you need to know the tenant’s who will want to live there, inside out.
If you’re aiming at the family market; they’ll need good schools, easy access to shops, and things like nearby parks and family recreation areas are always appealing drawer for anyone with kids. This information will usually be the deciding factor for families, especially if they’ve relocated to an area, and don’t know much about it.
You’ll take a completely different approach to young couples, or singles, who have come to look at your house or apartment. Often, they’ll want the hustle and bustle of a town or city life. Transport can be a key draw so that work and leisure are equally accessible. Bars, restaurants, and nightlife can also be what a younger target audience is after.
Whoever it is you’re marketing to; it’s worth making them your niche, especially if you have plans to expand your portfolio in the future. Word of mouth is a powerful marketing tool, so, being known to offer particular types of properties, in specific locations will stand you in good stead for your real estate future.
And, by niche; we really mean niche. Perhaps you could specialize in larger family homes for those renting with 3 plus kids. Or, maybe it’s young couples who are at the stage of leaving some of city life behind, to start a family, but they still crave plenty of amenities and aren’t quite ready for full suburban living just yet. It’s all about really getting into people’s journeys and as a result innate understanding of what they need and want from their property.
More Than The Bare Minimum
Okay, so you’ve nailed the property itself, and discovered and got to know your niche target market. The work doesn’t end there, unfortunately. It’s your job as someone’s landlord to be the best you can be.
You’ll want to keep tenants happy and have them in residence for as long as possible, ensuring they sign longer rental contracts with you, and that you’re not worrying about paying off that mortgage. Therefore, it’s crucial to do well above the bare minimum for both the property and your tenants.
Starting with your investment property; it’s not always a good idea to buy the cheapest fixtures, fittings, and items for the property. By no means do you need the most expensive, however, it’s worth thinking about the longevity of items, and how fixtures complement the style of the property.
If tenants are constantly contacting you to fix or replace things; everyone’s life will be made easier. Also, investing some thought and effort into the appearance of each space is the best way for your tenants to settle in and want to stay put for longer.
Regular inspections should not just be about seeing how the tenants have treated the property. They should involve you checking out the finer details and making updates and improvements when necessary.
If you have more than one or two properties; it might be worth investing in a reputable management company to do the thorough work. Ensure you get a detailed checklist so that changes can be straightforward and swift. These things will add to the trust between you and your tenants, and they’re likely to recommend you in the future.
Keeping A Careful Eye On The Market
Timing can be everything when it comes to property investment. Therefore, whether you’re after another place to add to your existing list of homes, or you’re wanting to step foot into the world of real estate and become a landlord; do not rush the process. Gaining a clear understanding of what the housing prices are doing, in your chosen location, is the best way to understand when to put in an offer.
Even if there is a sudden drop in the prices; this doesn’t always mean it’s a great time to buy. You need to take into account why those prices have dropped so much and so quickly. Ask yourself what that means for the area in particular and the rental market as a whole. Or, is it more of a state or national issue?
Getting to grips with the reasons behind the numbers should be your priority here. You’ll be better equipped to make expensive investment choices if you fully comprehend the pattern of what’s happened to the market previously, and in the present. You can never fully predict the future regarding real estate, but educating yourself on the highs and lows, will allow you to prepare successfully.
Keep on top of the local news and what’s happening in an area. A school or shopping mall closure can be devastating to a particular location. It can mean job losses, and both homeowners and renters, flocking elsewhere. Similarly, plans for future investments can really bring you somewhere to live and push prices up. Knowing this information before the masses will allow you to sell, or to invest, for the best price possible, and will help to protect your money, as a landlord.
The more you know and understand about all of the above; the more you’ll be able to take well-informed, calculated investment risks.
Risks do not have to be reckless; they should be quite the opposite! Therefore, ensure you have a healthy contingency fund at all times, and if you have to implement a “plan B”, it won’t impact your finances too much. It can be a lot of hard work, especially when you’ve just started out.
But, if you put the groundwork in; those properties will be working harder for you in no time, and you’ll be enjoying landlord success.