Working with a company like Vista Realty that specializes in property management affords me a great deal of knowledge and connection to share in regards to rental property investment. I can offer specialized direction and a wealth of understanding in helping you to grow your own personal wealth and diversify your investment portfolio. Our local rental market is steady and at Vista Realty, we have 40 years of experience navigating that market and protecting rental investors. Call me today to begin your rental home investment search and your relationship with Vista. Keep reading for a quick overview of rental property investment.
Rental property investment is as old as the practice of land ownership. A person buys a property and rents it out to a tenant. In general, the owner is responsible for paying the mortgage and property taxes, and for maintaining the property. Ideally, the landlord charges enough rent to cover all of the costs. A landlord may also charge more in order to produce a monthly profit, but the most common strategy is to be patient and only charge enough rent to cover expenses until the mortgage has been paid, at which time the majority of the rent becomes profit. Investors must know the market in which they are searching for property or hire an expert to help. For investors seeking an income stream from rental properties, the most important aspects to consider are property location and market rental rates. As for location, many successful rentals are located in close proximity to major schools. For example, if you buy a property near a state university, students are likely to want to rent it year after year. There are also many other features of a profitable rental property and some take time to learn.
Once you’ve found an ideal property in an area where people want to rent, use a mortgage calculator to determine the total cost of the property with interest. It’s also worth researching different mortgage types in order to secure a favorable interest rate for your rental. There are, of course, blemishes on the face of what seems like an ideal investment. You can end up with a bad tenant who damages the property or, worse still, end up having no tenant at all. This leaves you with negative monthly cash flow, meaning that you might have to scramble to cover your mortgage payments. There is also the matter of finding the right property. You will want to pick an area where vacancy rates are low and choose a place that people will want to rent.Perhaps the biggest difference between a rental property and other investments is the amount of time and work you have to devote to caring for it. Your best course of action to avoid liabilty and protect your investment is to hire a property manager to oversee maintenance, manage tenants and rent, and handle tenant turnover.