Once you decide that you are ready to make the leap and purchase an investment property in Florida you will want to make sure to do research and prepare to have the best experience and largest profit possible. You will want to consider first where you buy and research the location. This is important as location is critical to a successful rental property. You will want to research ways you can maintain your property that is both reasonable and simple for you. You will want to have a system to check on potential tenants and think about what you want to know before you rent your investment property out. Below I will go into detail about the things you need to consider so that your real estate investment experience in Florida is a good one.
- Picking the right Location
You will want to evaluate the location of your rental property. It should be ideally in an area that has a Fortune 500 company in the area, the area has low unemployment, the area has high population growth in recent years and the home appreciation is growing and considered a good area to buy and live in. In addition you will want to consider the rental prices that are being charged in the area as well as the cost of houses. You ideally want higher rental prices to your lower cost to buy. This will give you a better profit margin overall.
- Managing your property
Once you pick your investment property you will need to figure out how you will keep on top of things that might break or need to be updated. If you are purchasing a condominium the nice thing is that you won’t need to take care of the landscaping and outdoor details. If you are purchasing a home with a yard you will need to consider the upkeep. You can either reduce the rental rate or have a tenant care for the lawn or you can hire a landscaper to mow the lawn and keep the yard looking clean and inviting. Look around at various landscapers if you are going that route and check out the lawns they have contracts for. If some of your neighbors use a landscaper sometimes they will give you a better price to add you to their service since they are already taking care of a property in your vicinity.
For the inside of the property you will need to make sure you have a plan to keep up with anything that breaks and needs repair. If you live close to your rental property and you are handy then you can save some money by doing it yourself. Most people don’t want to deal with having to do it themselves, so if you are in that camp you will want to look into hiring a company or handyman to tend to any maintained issues. Ask around to see if any other owners use someone with a reasonable price. You can usually contract with an individual or company for a monthly fee. This will allow them to always be available should something break. This way you have that cost budgeted into your total cost and you know what to expect monthly.
- Picking your future tenants
You will want to make sure that you thoroughly check out your potential tenants. I recommend you do a background check as well as a credit check on potential clients. You want to know if there is any criminal history as well as any history of not paying for loans or bills. These would be red flags that the tenants might be some trouble. You will want to try to find tenants with a clean background check as well as a good credit profile. It is also beneficial to ask for a reference from a previous landlord. This will show they have a good history of taking care of their rentals and paying on time. All of these things are important to save you a headache down the road.
Keep an eye out for more posts about where to look for an investment property and the businesses that make their home there.