Essential Investment Property Advice For Newbie Real Estate Investors

Posted on: May 2, 2011

Categories: Buy

Author: lbuen

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Investment Property Advice Image by HVargas via Flickr

Cash Flow-Protective Investment Property Advice

Always remember that there are two parts in the equation of making money in real estate: the rental income and the expenses. One will fill your cup, the other can possibly bleed you dry if you are not careful. The key then to a profitable real estate investing is to find ways to increase rental income while curbing expenses. However, you can only do so much to increase rental income. So it makes sense to focus some energy on keeping expenses in check. Besides, no matter how sizable your rental income is but your expenses are also over the top, then it could eat away at your cash flow and you could still end up in the red. To help you maintain a profitable balance between the two, heed the following investment property advice.

Investment Property Advice When Buying:

Acquire Low-maintenance Properties

When buying an investment property, always keep in mind that your tenant, not you, will be staying in the property so skip curb appeal and other features that can only add to your maintenance costs. Do not also be easily swayed by a bargain price if the structure looks like it needs maintenance that could just eat away at the savings you get from the cheap acquisition. Instead choose to buy properties that are built with materials and fixtures that entail minimal maintenance. Opt for properties that are durable and needing very little upkeep. This includes lawns, landscaping, hedges and the like.

Investment Property Advice On Maintenance

Hire Mr. Fixit

As a newbie real estate investor, you may have intended to perform some of the tasks yourself. However, it pays to have a reliable handyman around to handle everyday maintenance and repairs to free up some of your time to search for additional properties and minimize maintenance costs. By having someone to immediately address property concerns needing repair, you can avoid the exacerbation of problems that can incur you large expenses. This will also be much appreciated by your tenants. You will be glad you hired a handyman for your first property especially if you acquire another rental property.

Make Your Motto “Prevention is better than cure.”

Make it a point to repair leaky faucets, roof, or toilet or damaged floors as soon as you can. That is what Mr. Fixit is for. Otherwise, the damage can compound and so will your expenses. Seek advice from your maintenance guys on how to anticipate repairs and ask for suggestions on how to substitute items needing high maintenance with low-maintenance components.

Investment Property Advice When Renting Out

Tighten Tenant Screening Process

If there are high or low maintenance rental properties, there are also high or low maintenance tenants. As with your preference on rental properties, go for low maintenance tenants. Do background checks and prepare legal contracts that can protect your property. Avoid renters who incessantly complain and who cannot keep their homes tidy. Selecting responsible tenants can substantially do a lot in minimizing maintenance, repair and depreciation costs, not to mention your headache. This adds to your profitability.

Enforce Rigid Repair Clauses

To prod tenants to be responsible in taking care of their rented homes, make it an agreement that they bear the first $100 of repair expenses. You can also ask for steep security deposits to ensure that they do not vandalize your property. Just make sure to properly explain to them why you are setting these conditions so that you do not turn off good renters.

Heed these pieces of investment property advice and you can be sure that you can protect your cash flow and profitability by minimizing maintenance costs and other expenses.

 Essential Investment Property Advice For Newbie Real Estate Investors
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