Real Estate Investment has as many options as If you’re positioning to become a landlord, the first step is due diligence.
Investopedia.com, the online investment guidance resource since 1999, recommends that beginners start with a single-family dwelling or condominium. While condos appreciate more slowly than single-family homes, owners appreciate the fact that the HOA handles all the common area matters, leaving the property owner concerned only with the interior repairs. Single-family units, particularly those with more than one bedroom, tend to attract couples and families which are proven to be more financially stable tenants. But Investopedia.com cautions that it’s important to identify a neighborhood that offers the services and amenities a stable family or couple seeks—good schools, parks, controlled traffic, and more.
The job of being a landlord means being available 24/7 to handle repair phone calls. If that’s outside your capabilities, you may want to hire a property management company. But not every locale offers property management services, so check what management services are available and take the time to compare the services and pricing multiple management companies deliver. Remember that paying for a property manager means you’ll net less from the property than if you managed it yourself.
Commercial property typically nets an annual return of between 6 – 12% compared to single-family properties (1 – 4%), according to Matt Larson of NOLO.com, the legal online encyclopedia. Everything is bigger with commercial real estate investment including your repair costs, insurance costs and risk factors.
Just as with any investment, measure your risk tolerance when determining what type of investment property best suits your interests and financial capabilities. We encourage real estate investors to include their wealth management professionals and legal teams in these important investment decisions.
Moreover we recommend to new real estate investors that they have a serious sit-down meetings with our pros and their inner circle of family. Don’t expect that just because you have a teenager that he or she will pitch in to help. Or don’t imagine that your spouse’s idea of a well-spent vacation is painting your rental house vs. soaking up the sun at the pool. Frank discussions about how your investment will be managed among you will save disagreements later.
If your interest is in residential investment property, contact our experts at Park Properties Realty. Our team has knowledge and personal experience in real estate investment that sets us apart from others in the market.