Venturing into real estate investing may feel daunting at times. It is a tough industry and for new investors, walking into this field inexperienced is like tiptoeing around landmines that can obliterate your returns. However, New Haven property management company Real Property Management wants to help new investors in Southern Connecticut learn how to invest wisely. That’s why they’ve dedicated themselves to helping their clients get the most out of their rental property with tools geared at educating property owners as well as industry-leading services for professionally managing the property.
First Things First
New investors need to keep in mind one crucial fact: the decisions you make early on in the purchasing process are ones that will affect you, and the success of your rental, long term. Everything from location to layout has to be considered before you put a single dime towards a house. The kind of property you choose will invariably affect your income earning potential.
It can even determine what kind of tenants you attract, and how long the home remains vacant between tenants. Let’s examine the things you should consider when shopping for an income property.
Envision your Ideal Tenant—Before you begin shopping for rental property, focus on the type of person you hope to attract as a renter. Visualize who your ideal renter is and what they might want in a rental home. Are you looking for a college student who rents short-term? Or do you gravitate toward families who generally commit to longer lease terms? There are countless types of tenants, but New Haven property management company RPM Southern Connecticut believes that by starting with the end in mind allows you to narrow the focus of your search and to ultimately select something that will help you achieve your goals.
Get to Know the Market—It’s important to understand what kind of market you’re entering. Is it comprised of mostly owner-occupied homes or is it surrounded by other rentals? Is it near major employers or a university? Take your time studying the area. Consider things like location, neighborhood surroundings, schools, parks, public transportation, shopping and amenities nearby. Don’t forget to check on the crime of the area by contacting the police or looking at the public library for accurate crime statistics for the neighborhoods you’re interested in purchasing. Items to keep an eye out for are vandalism rates, serious crimes, petty crimes, and other recent activity. You might also want to ask about the frequency of a police presence in your neighborhood.
Understand Your Financial Commitment—New Haven property management company RPM Southern Connecticut reminds investors to consider things like property taxes, local job market health, school ratings and future area development. These items factor into the value of your property and how well it will rent now or sell in the future. Insurance is another expense that you will have to consider from the outset, so it is good to know just how much you will need to carry. If an area is prone to hurricane damage or flooding, paying for the extra (but necessary) coverage can eat away at your rental income. Coming to the finance table with all of this in mind will help you understand what kind of financial commitment you can handle and help you acquire the right kind of mortgage.
Picking the Perfect Investment Property
Now that you’ve taken into account all the preliminary factors of purchasing investment property, you are now ready to begin your search for the perfect rental home. If you have ever rented a home yourself, then you know what home features renters are looking for. As with every part of the Southern Connecticut property management process, your New Haven property management team can help answer any questions you may have during the purchasing phase. Here are few suggestions from the pros:
Avoid Fixer-upper Homes—Selecting a home that needs considerable TLC might seem like a deal at first but this type of property isn’t the smartest way to go for inexperienced investors. Avoid anything that requires major upgrades on the core of the house, like piping, electrical or structural damage, which can really turn the home into a money pit. However, properties that suffer from mere cosmetic defects like bad paint, flooring or landscaping, might be the kind of diamond in the rough you can afford to tackle when you’re first starting out.
Develop a List of Must-Have Features—This is less about aesthetic preference and more about functionality. Remember, you are trying to get the most value out of the home so you can charge an appropriate yet robust rental rate. Our team suggests searching for a home that is:
- No older than 15 years. This will help keep down maintenance costs and save you money long term.
- Located on a quieter street with a fenced yard it is generally more attractive to renters.
- An uncomplicated layout with a minimum of 3 bedrooms and 2 bathrooms.
- No less than 900 sq. ft.
- Equipped with a one-car garage
- Located in a neighborhood where home values are appreciating.
If the home is in a HOA, there may be annual dues as well as fees associated with violations. Be sure to identify what the HOA codes are and how you will enforce them with your tenants. Also consider the city ordinances to learn what constitutes a code violation and what fines could be accrued.
Go Through the Property Like a Prospective Tenant—Narrow down your search to a few options and walk through them again with the eyes of a renter. Take note of what kind of upgrades are needed or what measures you’ll need to take to ensure the property is a safe place to live. Once you feel confident that the prospective rental would be a place you’d be happy living in, it’s time to make the purchase.
Working with the Best New Haven Property Management Company in Connecticut
Congratulations! You’ve just purchased your first investment property. However, your hard work isn’t done quite yet. Managing the property is an ongoing task that requires precision as you navigate all the nuances of daily property management. Remember, a well-managed property can be a lucrative investment. That’s why it’s smart to rely on professionals to do that job. As a nationwide company with over 275 offices, RPM Southern Connecticut is equipped to manage your rental in an efficient and professional manner. You can rest easy knowing that our professional property management services cover every aspect of the real estate investment process with:
- No-Nonsense Pricing with No Hidden Fees
- Customized Rent-Rate Evaluations and Targeted Marketing Strategies
- Rent-Ready Assistance and Comprehensive Tenant Screenings
- Routine Interior and Exterior Property Inspections
- Affordable Remodeling and Maintenance Services
- Risk Management and Eviction Services
- Easy-to-Understand Accounting and Maintenance Reports
- Online Rent Payment Management for Owners and Tenants