First time investor | What you need to know about real estate investment
Real estate property management is a huge responsibility to take on, and can be overwhelming if you’re new to investing. When you invest into real estate, your goal is to put money to work today and make it grow so you have more money in the future. You have to make enough profit to cover taxes you pay, costs of owning the property (utilities, maintenance, etc.) and the risks you take while putting your time into the real estate property. At FRE, we want you to have a smooth transition into managing your first investment, so here are a couple things to think about before you make the leap into real estate property management.
For first time real estate property owners, it’s a good idea to hire a property management to do work, some contracting, and minor maintenance issues such as a clogged drain or a drafty window. If you are experienced with contracting, it will be easier to write up leases and insure leases stay current. Beginners will most likely need assistance until they can comfortably handle issues on their own.
Real estate property management is a time-consuming investment. Remember the focus is on the tenants who pay good money to live in rental properties. In addition to that, real estate is not the type of investment that turns into a big profit over night. It can take a couple years, if not longer, to maximize investments. First time investors will need to learn to be patient because it isn’t a get-rich-quick type of investment.
As a first time investor, it would be wise to choose a smaller property as the initial investment. Jumping straight into a fairly large property can be overwhelming to manage. A lot of investors end up having a property management firm tend to those properties. Managing a smaller building and being fully comfortable with that, comes with investing in real estate will make larger properties easier to tend to.
Potential investors need to consider all costs, and hiring a real estate lawyer to help them make the most of their investments and any profits they yield. Investors have to pay the taxes and insurance on the property, as well as any costs associated with maintaining and managing the property.
The time you put into preparing for real estate property management will make your experience as an investor easier and enjoyable. For more help or information about investing in real estate, contact FRE Property Management and let us help you get started in the property management business.