If you’re preparing to buy your first rental property, you might feel a bit of stress.
It would actually be really strange if you didn’t.
Even experienced investors get nervous when it’s time to close a deal or look for a new acquisition. In our current market, properties are moving quickly and investors are competitive. You need to be prepared and you need to gather every competitive advantage you can find.
Stress can be a motivating factor, but it can also hold you back. If you’re just starting out as a real estate investor and you’re trying not to lose your mind during the process of buying a property, the best thing you can do to set yourself up for success is to surround yourself with experts.
Learn from the mistakes others have made so you don’t make those same mistakes yourself.
At Krystle Properties, we work with rental property owners at every stage of their investment career. We help identify acquisitions, we look for new opportunities, and we provide comprehensive, full-service Benicia property management and leasing services for your entire portfolio.
Working with us is a great way to reduce the stress of buying your first investment property.
There are other things that can help too, however, and we’re exploring those today.
Establish Your Investment Goals
Do you have a set of investment goals that will help you make good decisions?
This is an important part of investing, and the more planning you do, the less stress you’ll experience.
Before you begin your search for the perfect rental property, you need to have clear goals and expectations. Without a set of written investment goals, you may find yourself buying anything that comes along. Instead, you want to make strategic decisions that fit the profile of your ideal investment property.
Decide why you’re investing in rental real estate. Are you interested in short-term cash flow or long-term appreciation? These answers will help you decide which neighborhoods will work best for you and what type of property you want to focus on buying.
Investment goals should be clear, concise, and attainable. Write them out and review them frequently to make sure you’re on the right track.
How Well Do You Know the Market?
You might have done some reading and some research about real estate investing in general. But, have you really drilled down into the particular market you’re planning to invest in?
That’s important, especially here in California.
The Benicia real estate and rental market is just like any other market in the U.S. It moves through normal, predictable trends and cycles. However, it’s also unique. You need to understand the inventory, the sales prices, the neighborhoods, and the things that tenants are looking for when they rent.
This is also California. As you prepare to invest, get to know some of the tenant protections that are in place. You’ll need to consider these when you’re buying, pricing, and renovating a home. For example, investing in a multi-family apartment building that was constructed in 1970 will come with different regulations and requirements than investing in a single-family home.
Educate yourself on the real estate market so you’ll understand the inventory and what you’ll have to spend. Educate yourself on the rental market too, so you’ll know what kind of rental value to expect and how much you’ll likely spend on things like maintenance, vacancy, and tenant placement.
Study neighborhoods and shifting demographics. Figure out what you’ll need to spend to get the property that fits your investment goals. Knowing how the market works will help you decide what to buy and when.
Estimate Your Earnings and More Importantly – Your Expenses
Are you paying in cash for your investment?
Probably not, but a lot of established and institutional investors are.
Those are the folks you’re competing with for real estate inventory.
You’re likely taking a mortgage, and that might come with its own stress. Interest rates are still low, but they are creeping upwards. A large down payment isn’t required in the Benicia market, but if you’re buying your first property, you’ll likely have to have some cash up front. Once you begin to grow your portfolio, you can add more assets by leveraging what you already own.
As you’re crunching your own numbers, we recommend you spend some time estimating the rental value of the property you want to buy and the expenses that will be associated with it.
Some of those expenses will be fixed. You know what your mortgage payment is going to be every month, for example. Other expenses will be variable, such as maintenance on the property and vacancy costs. The more prepared you are financially, the less stress you’ll feel during the process.
One thing that may keep you calm is realizing that rental properties are low risk investments. You don’t get stressed about your stock investments. Rental property is safer.
Professional Benicia Property Management
Professional Benicia property management will really bring down the stress level, no matter how competitive the market feels.
To successfully invest in rental property without the frustration and hassles that can sometimes hinder the buying process, you’ll need some good professional help.
Hiring a professional Benicia property manager will save you time and money. The experience, advice, and income provided by property managers provides peace of mind and freedom. You’ll know how much rent a potential property will likely earn and how much you’ll need to invest to get it ready for the rental market. You can rely on your property manager’s experience to understand the local tenant pool and the property management trends that are currently driving the rental market.
You’ll also be introduced to lenders, brokers, agents, and vendors. Start with a property management partner when you decide you’re ready to invest for the first time.
We’d love an opportunity to work with you. Contact us at Krystle Properties, and we’ll talk about your investment goals and how we can help you reach them.
