What's it Like to Own an Investment Property?
Any smart businessman knows to make their money work for them
instead of the other way around. In today’s day and age we have
finance gurus that gab with regards to living within a strict
budget to have financial freedom. This is wrong because there is
only one certain way to financial freedom. The willingness to
obtain a system of getting a residual income is what can make a
person accomplish financial freedom, especially if the type of
investment they go after are
Investment Property is just one of the many kinds of investments available out there. To present you an idea, having a home can be an investment. Its value, compared with when you first bought it, may just be worth more at the present. You can easily sell it for profit or get it leased for a monthly income source for a continuous cash flow.
So you believe having an investment property is for you? Can you handle managing tenants, real estate agents, home buyers, and sellers? Sure you can! Simply stick with these easy steps and you are soon on your way to become a proud investment property owner!
1. Form an LLC or a Limited Liability Corporation - You are aware of this term since you probably see it everywhere. LLC, in definition is the better option for smaller businesses because it limits and shields the business proprietor’s personal liability risk from the company’s liabilities. You would want your company to be regarded as an LLC to shield yourself as the company owner from legal accountabilities.
2. Making use of a good real estate agent and reliable lender is a must - To simply and efficiently find out if an investment property is a good buy or not, you need to ask a professional -in this case, a real estate agent. Having said that, once you have decided to buy a property, you must have cash on hand for the 20% deposit. When it's time your real estate agent finds an excellent property to buy and you need the cash, you'll need a solid lender that will be able to process your dealings without problems.
3. Cash for fixing properties - Homes, like everything else will certainly experience wear and tear over time. Tenants won't take care of the properties as you do. Damaging is unavoidable so you need to have the funds for ruined heaters, leaking roofs, what have you.
4. Contracts are everything - Carefully choose your future renters. Contracts are made to seal the agreement involving the tenant as well as the owner. Don't fail to discuss every little detail in your written arrangement because you wouldn't like to find yourself struggling to evict a non-paying renter because of contract flaws.
5. Show patience, a lot of it - Just about everything is going to take time. It will require time to get hold of a good investment property. It is time intensive to look for excellent and cost-effective building contractors. Searching for good renters take time. Evicting takes time. Always remember the saying that “good things come to those who wait” and you'll be fine.
6. Things are all purely business - Count on non-consistently paying tenants to have alibis and ask for lease extensions. Never allow their miserable stories faze you and throw you off-guard. It's your money that will be put to potential risk in the end. Kick-out your tenant if you have to so that you will not generate losses. It's either you or them, that easy.
I am Dani, a real estate investor and finance expert from Los Angeles, California. I am also the PR manager of cashflowsavvy.com, a real estate investing company operating in Memphis, TN but based in Los Angeles, CA.