The demand for single-family rentals is at an all time high, thus including real estate to one’s investment portfolio is not a bad option. Here are five tips when considering investing in a single-family rental home.
- Know the why?
Why are you investing? Perhaps you want a low-risk investment, then investing in a more expensive home in a good school district will be ideal as your returns will be steady. The returns may not be as high compared to lower-priced homes, but just like any investment, there is a risk associated.
- Invest Outside Your Neighborhood
By hiring a local property manager, you can invest outside where you live. This can help if you are looking to explore other housing markets. For example, if you live in San Francisco then finding a cash-flow positive house will be more challenging then venturing outside San Francisco. With careful analysis, the cost of hiring a property manager can be offset with the returns.
- Separate Investing from Operations
As mentioned above, using a property manager will help you ensure that the property is leased and maintained. Some people may be afraid to rely on a property management firm, but do realize that such companies do this for a living and may be better equip to handle tenants.
- Real Estate Investing Takes Time
While on TV, house flipping seems like a quick way to building wealth, this is not the case with real estate investments. Short term fluctuations in your portfolio should not phase you, since you should be looking at your property as a multiyear investment.
- Use Available Tools and Resources
Technology has made it simpler to invest in real estate. Using companies such as Roofstock, you can invest in properties without even physically seeing them. Other applications such as Cozy, Property Buddy, and RenTracker can help landlord manager their portfolio.
Overall, the future for investing in single-family rentals is bright. With modern technological tools allowing you to invest in multiple markets, investing in real estate is easier than ever.
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