June 19th, 2012 Archive

Some Thoughts on Rental Property Investment

June 19th, 2012 by Adaire in Sharing Success

Rental property investment is one of the best investments you can use your capital for. In fact, with this type of investment, you can leverage the money you have and use it to acquire valuable properties at only a fraction of the price.

Let’s say you made a $10,000 down-payment on some rental property valued at $30,000. What you can do is rent out the property and use the monthly income you gain to pay off the rest of the cost over a period of years. After a number of years, you’ll be able to complete your payment and acquire a $30,000 property – for only $10,000.

This is a common tactic in the real estate industry. However, not a lot of people realize the key to this type of transaction. The key to this type of transaction is not the conditions of the loan, the interest rate, or even the property. They key here is finding a long-term tenant that can provide you with a steady income, which you can use to pay off the property.

But how do you find and keep tenants? While I was contemplating about this concern, I came across an article from Healthy Wealthy n Wise. The article was called, “Tips on Maintaining Rental Property When Investing.” In that article, Ethan Lumsden reveals a lot of interesting facts about rental property.

In one section, Ethan says, “Maintaining rental property is incredibly important. Studies have revealed that the number one reason tenants renew their lease is because it continues to be maintained well! Tenants tend to terminate their leases when things are left to get worse or they were ignored.”

If we want to keep our tenants, Ethan suggests that we put ourselves in their shoes. No one wants to live in a home that is constantly breaking down. It is important to establish good rapport with your tenants to keep them. Once they feel that they are being mistreated, they can simply leave.

Check out Ethan’s article for more useful tips regarding this issue, including information on repair forms, work orders, means of communication, and many others. Repairs and maintenance duties are an unavoidable issue that you should consider part of the industry.

Another thing you can do to make sure your tenant stays is to find the right tenant. Unfortunately, it takes some experience and knowledge to be able to find good tenants. For this task, you might need the help of a professional realtor.

In the same magazine, Jason Lom’s article, “Locating the Realtor That Best Suits Your Needs” might be a good place to start for some great insights regarding realtors. Here are two tips from his article on how to find the most efficient realtors:

1. Create a List

One of the most important things that you need to do when looking for a real estate broker is to create a list of different top selling agents, so that you have a wider range of options to choose from.

2. Asking the right questions

After narrowing down the list, the next step that you need to do is interview the people you think are competent enough to do the job that you ask for. Do keep in mind that many successful real estate agents are well-spoken, possess high intelligence, and are always presentable when it comes to their appearance.

Read the rest of Jason’s article to find out more information that can help you find the right realtor. The real estate industry is something that a lot of people can succeed in. Accountants and bankers succeed because of their financial knowledge. Salesmen succeed because of their ability to build rapport with buyers and tenants. Even carpenters succeed in this industry because of their great ability to restore old property.

Regardless of what your main expertise is, there is always an advantage it can earn you. But if you really want to make the most out of your investments, don’t try to do everything by yourself. You have to be self-aware. You have to know where your strengths and weaknesses as an individual are. If you’re weak in one area of business, find someone who’s good at it and work with that person.

Good luck! :)

Adaire

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