By now, you should be well aware that the real estate market has changed considerably over the last couple of years. Adjustable rate mortgages are adjusting people right out of their homes and that increases foreclosures.
When foreclosures increase dramatically, it means that there are a lot more houses on the market. As more and more houses come on the market, the market gets flooded with properties. The law of supply and demand tells us that when there is more of a product on the market, the price goes down.
But what does this mean for the real estate investor?
Think about this. There are a lot of people who are leaving their homes because they just couldn’t afford to stay there any longer. They may have problems like foreclosure or credit trouble, but they still have to live somewhere.
Where are they going? A few lucky ones will be able to sell their house and move into a more affordable house. The majority will go to apartments or rental properties. They will all need a place to live. The result: RENTAL PROPERTY is becoming stronger with each passing day.
It’s the new black!
By rentals, I’m referring to single-family houses, apartments, duplexes, four-plexes, and the like. Rental property is on a long-term time frame whereas rehabbing is short-term. Wise investors see that the winds of change are blowing in our economy and therefore in our investments. They are adapting their strategy to be in line with rental property whereas they once would have bought and sold property.
If you’re considering becoming a landlord, you’ll have to get used to the idea that you need to maintain the asset over time and that you will have an ongoing relationship with tenants. There is a learning curve, but there is a lot of free help out there for those who want to continue to invest wisely and profitably in real estate.
I currently own 31 rental units. And I’ve learned dozens of tips and tricks during the years I’ve owned them. I learned most of them the hard way, but you don’t have to. Below, I’ve provided you with three quick tips. These should tide you over until next week when I’ll reveal a few more:
1. You can nip a lot of it in the bud by screening your tenants before you rent to them. Screen the living daylights out of them. This is THE single most important aspect of being a landlord. A bad tenant can make your life a living hell!
2. Make a visit. And visit on a regular basis. Maybe not to collect the rent every month, though that’s the right thing to do in most circumstances. Tell them when you rent to them that you figure them to be nice people and that you want to respect that by making sure the place is always safe, comfortable, and in good repair for them.
3. Tell them that you have decided to start a new maintenance program and you will be coming by from time to time to make sure that the unit is in tip top condition for them. Saturday is a good day to catch most folks at home. Make sure you call ahead to set up a time that is convenient for both of you.
More tips to come next week!
Until then, happy (and profitable) investing!