Buying an investment property is a smart move in today’s business investment environment and can turn a significant profit, opines National Realty Investment Advisors. This New Jersey-based firm deals exclusively with real estate investment property options in the Philadelphia PA area, which provides unique opportunities for people who want to build equity wealth portfolios. The art of real estate investment requires hard work, commitment, and expertise, but the rewards are more than satisfying. In order to develop a successful portfolio of high return properties in this venture, it is wise to adhere to the following guidelines.
The first thing that a real estate investor should consider is location. National Realty Investment Advisors stresses this the most for investment property. When buying a property that will be used solely for investment, there are unique factors to look for as compared to it being purchased as a primary residence. Investors will want to look at the surrounding area and find out if the property is located near a college, public transportation center, or nightlife central. The ease of shopping, parking, and proximity to entertainment is all a consideration. Determining what kind of environment the property is in can help an investor properly market and advertise this asset.
Economic times are tough, and so people get involved with real estate to increase their revenue stream and safely put away for the future. Tenants paying off a landlord’s investment home do just that. However, a common mistake that is made by amateur real estate investors is spending too much time and money on improving their first property. While the property should be maintained and kept at a high level of quality, that does not necessitate a complete renovation of the property each year. National Realty Investment Advisors believes that investors should pick the right combination of finishes for their property that will add value, maintain rents, and that can last—knowing the homes will undergo wear. Kitchens and baths must be paid attention to as well.
National Realty Investment Advisors indicates that, like with any business venture, it takes time to generate revenue. Entrepreneurs realize that they will not see a profit immediately and that they have to be patient if they want to see a return. The same practice applies to real estate investment. People who own properties will want to think about long-term goals with their investments. The housing market, although stable now with the financial crisis winding down, can fluctuate within a few percentage points. To see immediate results the investor must purchase the property far under its renovated or re-built value. That takes expertise or ample market study. But still, there are numerous benefits to long-term property investment ownership, such as tax advantages, positive cash flows, and long-term appreciation while the tenants pay off the homes. Within a few years, it may be possible to make enough income to turn property investment into a full-time career.
National Realty Investment Advisors encourages property investors to look for real under market value when choosing their assets. Getting the right location is paramount—but not at the wrong price. Property owners are more likely to see a return on their investment if they are willing to purchase a fixer-upper and put forth a little elbow grease, saving some re-building money if they can. There are thousands of properties around the country that need renovation or re-building and are currently not rented and have the opportunity to have their rent price inflated after repair to generate more revenue. Additionally, in some instances, a fresh coat of paint or some small touchups can help investors increase the rent of their property.
With any business venture, it is wise to be surrounded by professionals in the industry. Property investors should make sure that they are associating with contractors and handymen who are skilled in their craft. It is also important to have a reliable electrician, plumber, and HVAC contractor on standby to take care of overlooked problems in rental properties and perform inspections. Property owners should do annual checks of their units to avoid a large scale disaster and to take care of small problems before they escalate. National Realty Investment Advisors encourages owners to do the appropriate research and to find out how much certain tasks cost.
It is crucial to screen all tenants. Many property investors have incurred problems including lost revenue because they did not properly screen their tenants before they moved in. A good rule of thumb is to run a credit report on every applicant to ensure that they are reliable and can pay their bills on time. Prior landlord references and proof of cash flow and on time payments is required. Evictions can be a costly ordeal, and the best way to prevent this from happening is to make sure all tenants are credible ahead of time before move in.
Property investors need to recognize their rights as landlords. National Realty Investment Advisors urges investors to get a referral for a competent real estate attorney who specializes in evictions and disputes. Some tenants will do all in their power to take advantage of their rental property and may look for legal loopholes. A landlord should always protect him or herself by making sure a strong written lease is signed by all parties.
National Realty Investment Advisors Encourages Hiring an Accountant
As mentioned previously, there are numerous advantages to having a long-term investment property. With the right practices and procedures, an investor can easily become a full-time landlord and rely solely on the assets from their properties to sustain their lifestyle. Part of the help one will need is to hire an accountant. This person will file the landlord’s annual tax returns, making sure he or she is maximizing their real estate tax advantages,
“You should always include investment property in your long-term wealth creation plan and retirement strategy. It diversifies you from the stock market and gives you a hard asset that produces income. If you manage it yourself it is a huge obligation; the more assets that you acquire, the more work that you must put personally put forth. If you’re going to do it yourself you should start out by managing one or two properties at first. If you do well over a couple of years, then you can start expanding into larger areas. However, a really good idea is to hire a professional property management firm to work with you so that you are not overwhelmed,” advises an associate from National Realty Investment Advisors.