Investing in real estate is one of the best ways to increase your monthly income and your net worth. Like most things, the hardest part for first time landlords is just getting started. The secret to success is two-fold; first break the process down into small steps, and second build a team to support you:
1. Finances – The first thing you need is money to purchase the house. If you have enough liquid cash to pay for the house outright, you’re ready for the next step. If you don’t have money coming out of your ears, you need to draft the first member of your team; an investment banker.
Look for a banker that you get along with, that is willing to teach you and uses simple language. Jargon and complicated processes aren’t on the road to success.
2. Property – After you have your finances in order, you can start the search for the perfect property. Generally, there are two types of homes you will look at for property investment; move-in-ready and fixer-uppers. There are advantages and disadvantages for both types; you need to decide which way fits you and your budget.
This is also where we meet the second member of your team; a real-estate agent. There are many real-estate agents, and, like all industries, some are good and some are bad. You are looking for the same qualities in your real-estate agent that you found in a banker. A good real-estate agent will build a relationship with you and consistently find properties that will make you money.
3. Tenants – Assuming you purchased a move-in-ready home, it’s time to start collecting rent. This is more complicated than you might expect. You need to screen your potential tenants, ensure the house is ready to move into and then maintain the property.
The third member of your team is Provident Property Management. A good property manager will make you money by protecting you asset, keeping tenants in your property and saving you time – allowing you to start the process all over and continue to build wealth.
Provident has a network of bankers and real-estate agents that we have personally vetted, which means we can help you find the missing member of your team no matter what stage you are at in the game. Contact us today to get a free consultation and start (or continue) your journey in property investment.
4. Fixing the Fixer-upper – One of the benefits to getting a fixer-upper home is that you may be able to save money on the initial purchase of the home. You need to know what you are doing though, because the last thing you want is to discover you bit off more than you can chew after you’ve purchased a property.
Here you can add an optional member of your team. A good home-remodeler can help you fix-up the fixer-upper faster than you can do it alone, and still save you money on the initial purchase. If you are pretty handy, you can combine your skills with theirs to save you even more money while still quickly preparing the home for tenants.