Buying an investment property can be an exciting yet challenging step that requires a lot of work, effort and preparation. Some investors do not have a right plan set in place after purchasing a property. This often leads to poor management and a reduction in the value of their properties. It’s easy to picture the purchase of a property as the big end goal but in reality it’s only the beginning. So what steps can you take? And what can you expect? Whether you’re investing locally or in a distant market, here are the right steps to get you started and be in charge of your investment portfolio.
GET A RELIABLE PROPERTY MANAGER
Get a property manager that will help you secure tenants and also ensure that the property is managed efficiently. There are some cases where some investors choose to self-manage their property and then hire an agent just to secure tenants. This might work for knowledgeable investors that have time on their side. But if you’re new at this, there can be some challenges like managing a tenant whose rent is due and managing the payment of utility, costs associated with end of tenancy cleaning, and other bills.
For instance, you’d have to carefully review rent to confirm it is at the current market rate and also carry out regular inspections. This can get pretty overwhelming, especially if you’re not experienced enough. An experienced property manager will be the one to respond to any of your tenants’ requests for repairs while providing cost-effective solutions to complete the necessary repairs without reducing the value of your property.
When it involves finding an agency, remember to compare agency prices and you should also consider the right one that will conduct an impeccable job when managing your asset. This includes selecting the most suitable tenants and conducting regular inspections. If a tenant should damage the property or fall behind in rent, you will need a property manager who is skilled at dealing with such issues.
GET SOME RENOVATIONS DONE
If your purchased property wasn’t newly built, it will probably require a few repairs and most likely some renovation works. Depending on the condition of the property, the process may involve getting rid of fleas, roof repairs, mould removal, carpet upgrade, window washing and meth decontamination. You have to ensure you get quality upholstery cleaners, carpet cleaners and roofing materials. Renovating your property may enable you secure higher rent, attract good tenants or help you let your property faster.
Before you begin, it will be best to assess whether renovations could be of any value to your investment. You can consider asking some local letting agents for their assessment of your property before and after certain renovations have been completed. While you may decide to not carry out all of the renovations at once, you should develop a plan for the necessary things to be done. This will enable you have an idea of the costs involved and be prepared for future renovations when the time comes. It would cost you anything to go ahead and contact companies and compare quotes, finding ways to take care of repairs and boost your property value will certainly help you generate more returns. Go ahead and start contacting companies and comparing quotes from contractors so that you can be prepared for future renovations when the time comes.
If you didn’t secure an insurance before closing on your property, you should consider getting one as soon as possible. Insurance comes in different forms, and general home and building insurance is only scraping the surface. Before you proceed to lease your investment property, there are many forms of insurance you should consider. You will need to be covered for tenant damage, fire and hazard, liability and a number of other aspects that accompany being an investor. There are many other types as well, but it’s best to carry out a thorough research and ensure you’re covered for any situation that can happen. It will be wise to also consult with an insurance agent if you’re not sure of the choice to make and they can help explore coverage options that will suit your investing needs.
PLAN TO SCALE AND INCREASE YOUR PORTFOLIO
If you did not purchase a portfolio, you shouldn’t miss out on doing so. It’s easy for investors to get carried away into thinking that buying one property will suddenly carry them into investing success. It may work for some of them but won’t work for all. It doesn’t stop at investing in one property and letting time pass by. It’s best to have a multiple, single-family home portfolio that will serve as a better long term investment and generate bigger returns. When you invest in only one property for a long period of time, it may not entirely be your best investment. Whenever there’s a repair or vacant space, it will appear like there’s no positive cash flow. Whereas if you invest in four or more properties, an occasional repair or vacant space will not seem like an issue to you. The cash flow generated from your other properties will definitely be able to cover any cost that may arise on another property when an issue occurs.
IMPLEMENT AN INVESTMENT STRATEGY AND PLAN FORWARD
Implementing an investment strategy helps you to achieve your investment goals. If you do not have one set in place, you’ll need to begin now. You can begin by focusing on your investment goals and the necessary steps required to get you there. Think about your future plans, do you wish to acquire more loan? What are the required steps to be taken presently and in the future that will enable you to buy more properties? These are a few questions to bear in mind as you devise an investment strategy. If you’re not sure where to begin, you can consult with a financial advisor that will help you develop a strategy based on your investment goals and circumstances.