There is a lot to consider when you’re buying a Fort Worth investment property, but we’ve chosen the three most important things, based on our years of experience in property management.
As you’re looking for the right investment, remember to keep your emotions out of it. You’re not buying a house that you’ll live in yourself, and you don’t have to fall in love with the property to make a smart acquisition. Think like an investor, and treat your rental homes as a business.
Then, consider these three things.
How Much Rent Will You Earn?
Math matters, and while there are a lot of calculations you’ll need to make before you decide to make an offer on an investment property, one of the most important data points you’ll need is the anticipated rental value of the property. There are a lot of ways to make money on rental property, but cash is still king. You want to earn cash flow when you invest. So, consider what you’ll earn in rent. This is the first step in establishing what your income will be on the rental property.
After you understand your rental value, you’ll be able to determine what your monthly expenses will be and how the income and expenses will add up to provide you with positive or negative cash flow. Consider this before you pursue a rental property investment. It’s the most basic way to start the purchasing process.
How Will You Pay for the Property?
Hopefully, you have the financial stability that’s required to buy an investment property. You don’t want to take a lot of debt or personal financial hardships into a new investment. The rental property you acquire will need maintenance. In addition to paying the purchase price, you’ll also have to consider insurance and taxes. You’ll need to be prepared for routine and emergency repairs.
Unless you’re planning to pay for the property in cash, you’ll have to think about financing options. You have a lot of choices. The financing plan you choose will impact your overall ROI and the long-term financial gains and losses associated with your investment. So, do your research and choose reliable partners and advisors.
Different mortgages and investment loan options come with their own benefits and risks. Your personal financial situation will dictate which option works best for you. Consider the amount of credit you’re being offered, the interest you’ll have the pay, and the length of the loan term. Keep an eye out for low-interest rates, as they’ll help long term.
Professional Property Management Brings Better Results
Smart investors know that professional property management is crucial to the success of their rental property. Many investors think that choosing a local property management company will happen after they’ve purchased the home and they’re ready to rent it out.
The better idea is to work with a property manager before you purchase your investment. This relationship will help you choose a property that’s going to earn good income, rent to qualified tenants quickly, and be manageable to maintain. Don’t wait until after you own the investment to look for professional management. Talk to a property management company first.
These are the three most important things to think about before you make an investment decision. If you’d like some help with property management in Fort Worth or Dallas, please contact us at Trend Property & Management.