Have you considered being a landlord? Well you will definitely want to think it through before you take on the job. Dealing with the public is not for everyone. In Fact, most landlords find a way around dealing with their tenants directly.
Buying properties as investments will usually require renting them out to tenants. If you are able to find a tenant that stays for years you could be in good shape. Turning the property over for the next tenant can be a costly event. So if it happens often you risk your profit margin shrinking.
Advertising and vetting tenants is another important task for you if you intend to do it without a property manager or real estate Agent. The cost to maintain a credit checking service might not be worth it if you only have a few properties. However, there are ‘quick check’ service out there for landlords that also give background checks for a fee.
Rent increases are often legislated and in some areas have limits. Before you purchase any property be sure to check if they apply to the City you are interested in. This could be a deciding factor wether to buy there or not. If you are not able to increase the rents on a pace to keep up with the market you could be at a huge disadvantage.
Hiring a property management company will cut into your profits as well. However this is the preferred method for most landlords. The consistency of remote management and the hassle free repairs is very desirable.
Owning rental properties is a great investment in most parts of the Country. The rental market is strong in Orange County California and has been for years. Even during a bad economy people need a place to live. So if you are thinking about buying your first rental property consider these factors before jumping in. Looking to a professional to help eliminate some risk is an even better idea.
If you ever want to crunch numbers and see if the investment is a wise one, I am available for coffee. Just a phone call away and we can plan your passive income together.
