From house and land packages to luxury apartment buildings, there is no shortage of properties for a beginner to invest in. If you’re ready to take the plunge into buying up rental properties, there is plenty of information out there to help you get started.
What isn’t as readily available is a way to avoid the mistakes that past investors in rental property have made. In this blog, you will find a few of those top mistakes and a little on how to avoid them as well.
Purchasing Property with Your Heart, Not Your Head
One of the most common traps investors fall into is purchasing homes with their hearts instead of their heads. For example, it’s easy to buy a home based on emotion, as that’s where people will be raising their families. However, as an investor, you need to look at the property from an analytical standpoint, not on the basis of how nice a swing set would look in the backyard. Ask yourself these questions when looking at a property and you’ll avoid this mistake as well.
Will it provide the gains and revenues you need?
Is it the best location to attract quality tenants?
Will it quickly allow you to get a return on your sizeable investment?
Not Doing Your Homework
This is a mistake that is seen time and time again: a beginning investor not doing the homework and research they need to do before jumping into buying a property. Understanding the property market takes time. You can’t just rush in, buy up property, and expect to succeed. There are signs that you’re ready to purchase that first investment property, you just have to watch for them. From understanding how to run the numbers to having enough savings to not only cover the purchase of your rental property but keep it running smoothly as well, these signs will help you immensely.
Buying the Wrong Property
This is one of the biggest blunders beginning property investors make. There are so many different properties out there for sale, it can be confusing to choose the right one. If you can’t seem to figure it out on your own, it’s always a good idea to check with a local realtor for ideas. They will have listings and know the in’s and outs, crime rates, and more for the area you’re looking to buy your property in.
Saving Money by Self-Managing Your Properties
As tempting as it may seem, no matter where you live or where you buy your first property, you need to realize you can’t do it all. Nine times out of ten, you’re going to have other obligations and managing rental properties is a huge undertaking. Take the plunge and hire a reputable company for rental property management in Indianapolis or wherever you might have your properties. While it might not seem like it now, hiring someone to manage for you will save you money and time in the end, and that’s what it’s all about, isn’t it?
Expecting to Make it Overnight
Just like any other business, property investment takes a lot of time and even more patience. You can’t expect to purchase a rental property, or a few rental properties, and have them start making you money overnight. There’s a lot more than you think involved in the process, from finding renters to making sure things are in tip-top shape for them to move in. Stick with it, do the work and you’ll succeed in time.
These are just a few mistakes that you should avoid when getting into property management. Remember, patience and hard work are key, but so is getting the help you need to do it.