One of the simplest ways to invest in real estate is to buy a property and rent it out. Investors can either aim for a long-term leases or hold a property for just a short time before they sell it. Purchasing and renting out a property offers two opportunities for income - rent money received and profit earned when reselling the property.
However, renting out a property is not always straightforward, so there are some things that the would-be investor needs to consider. The first is location: the property you are trying to rent needs to be a location that is attractive to renters. Secondly, some homeowners associations ban or limit the rental of their residential properties. If they allow only a certain number (Rental Cap) of properties to be rented, you may have to enter a waiting list before your property is eligible. Perhaps the most difficult part of renting is tenant selection. Potential tenants should be prescreened and interviewed before signing any leasing agreement. If you choose your tenants carelessly, it can cause a lot of trouble. Lastly, physical deterioration of rental properties is often faster than normal. As a landlord, you have to be ready to maintain, repair and replace more frequently. The agreement between tenants and landlords should always be carefully drawn up in order to avoid possible trouble.
According to statistics, more than two thirds of landlords directly manage their properties without hiring professional companies. However, some investors prefer to use a property management company. If you are one of them, Providential can recommend reputable companies that you can trust.