Every investor wants to diversify their investment portfolios more. Well, one of the best ways is to invest in real estate, which millionaires still say is the greatest investment around today.
However, there are right ways and wrong ways to generate rental income, so you need to optimize your investment strategy. Let’s talk about how to get the most out of your investment real estate property.
Choose The Right Market
The city and neighborhood where you purchase a home can make or break your investment. An area like Salt Lake City will have plenty of incoming people, as the population grew by over 58,000 people last year.
However, don’t stop there.
Ideally, you want to find a property in an area that’s less likely to go downhill. A neighborhood with access to public transportation that’s walkable to shops or downtown areas or near a good school will be the most beneficial.
Ask around to see what’s going on with the neighborhood and see if there are any red flags like crime, excessive noise, or too many people leaving.
Choose The Right Investment Real Estate Property
The building itself is the other factor that’s somewhat out of your control as a landlord. If it goes downhill, so does your investment.
Essentially, if you spend the money on a downpayment only to find you need to replace a boiler and roof within a couple of months, you could find yourself completely broke in no time.
For that reason, we always recommend searching diligently for a property that will last. The only time you have total control over the building is when you decide whether or not to purchase it, which brings us to our next point.
Search for real estate and always ask for as much information as possible related to the property’s history and surrounding area.
Choose The Right Realtor
Every realtor will tell you they can “do it all,” but you want to look for a realtor with experience in investment properties, as it’s very different from selling an ordinary home.
Find a real estate relocation agent who is upfront and honest with you about your earnings potential, current tenants, previous issues with the property, and everything else you need to know.
Choose The Right Tenants
Lastly, your tenants are the final piece of the puzzle in the “make it or break it” department. By choosing the right tenants, you’ll substantially limit your investment risks.
Essentially, the wrong tenant can do a lot of damage to your property or cause you unnecessary headaches. During the eviction moratorium, which is still in effect, there isn’t a lot you can do about it.
For that reason, do your diligence and find the right tenants for your property. One bad tenant is all it takes to ruin your income for the year.
Now that you know how to get the most out of your investment real estate property, there’s no time like the present to get started. The sooner you do, the sooner you can earn passive income.
Stay up to date with our latest real estate advice, and feel free to contact us with any questions!