Managing your real estate investment property is about more than just knowing how to fix a broken pipe or do other regular maintenance. You need to wear many hats, and how well you wear them will dictate your success or failure with real estate investment.
Follow these cost-effective tips for managing your real estate investment, and you’ll enjoy growth in value instead of mounting costs.
Plan to Reinvest
You cannot buy it and be done. To make your real estate investment a long term success, you need to plan on reinvesting. Designate a portion of your revenue to be spent on the upkeep of the property.
This will ensure you keep your property in great shape. Keep in mind that the more renters you have, the more wear and tear your property will experience.
Create a timeline and plan to replace your appliances. By performing regular maintenance and repair, you can extend their life useful life. Here are some average lifespans you can expect.
- Range: 13-15 years
- Refrigerator: 13 years
- Dishwasher: 9 years
- Washer: 10 years
- Dryer: 13 years
- Furnace: 15-20 years
- Water heater: 20 years
- Air conditioner: 10-15 years
As you can see, without proper planning, you could face buying several major appliances at the same time. This can result in you having to take out financing to afford them all. Doing this will cost you more than if you had planned and saved for these purchases.
Work With an Experienced Agent
Unless you have extensive real estate agent experience and are willing to do the work yourself, it is best to let a knowledgeable agent handle it. It is essential to find an agent who has experience in the rental market.
You can then use their knowledge base to your advantage. This will help you find, locate, and buy homes that are ideal for the rental market.
It will also help you when pricing your home’s rent. You want to get the most you can without pricing yourself out of the market by going too high.
Hire Cost Effective Labor
While you can save a lot of money by doing the majority of work yourself, sometimes this isn’t possible. You can save more by hiring a professional to perform the work from the beginning.
Hiring the cheapest labor can actually end up costing you more in the long run. Shop around for the most cost-effective yet also reputable service.
Borrow Carefully
Unless you have a vast amount of resources, you’ll most likely borrow money to invest in new properties or update your existing ones. When reviewing possible loans, don’t forget to factor in the fees and interest rates as a part of the cost.
Look for lower interest rates and more extended loan repayment periods. This will help limit the total amount you pay for the loan.
By keeping your loan costs low, you reduce the overall cost of the property and can put more profit in your pocket.
Have a Property Manager
Have you sat down and figured out how much time you spend managing your property investments? Remember that your time is valuable, and you need to account for this cost in your figures.
One way you can reduce this cost is by hiring a property management company. The peace of mind and reduced labor on your part can be well worth the cost. You may even find that paying for a professional manager costs you less than doing it yourself.
Don’t just pick the first management company you come across. Make sure the company you choose has experience in the community, has clear policies, and offers a wide suite of services that can address all of your needs.
Contact our office today to have your property expertly managed.
