As we approach 2024, real estate is one of the most financially secure investments you can make. On top of that, Concord, NC, is a hotbed for landlords and tenants. That's why the charming city has witnessed a growth rate of almost 5.6% since 2020.
This rewarding venture is sought after by many but executed proficiently by few. Many newcomers think you can simply start investing in a real estate rental property.
However, this couldn't be further from the truth. There is plenty of hard work, expertise, and determination required. Most importantly, you must know the ten steps to utilizing this opportunity.
Uncover our insider's investment hacks below if you are ready to do so!
1. Conduct Market Research
Market research is a hot topic when investing in a real estate rental property. What's trending one week could be dead and buried for another decade.
Begin by researching the local area. In return, you will have a vision of the real estate landscape.
Be sure to examine factors such as property values, rental rates, and demographics at home. Also, research the area for schools, stores, and other amenities influencing property prices.
2. Priority Budgeting and Financing
The priority of 11 million individual landlords in the U.S. is to generate passive income. If you're not careful before investing, this will significantly impact your intended outcome.
Some of the most crucial expenses to add to your budget are the following:
- Property acquisition costs
- Financing costs, such as a mortgage loan
- Property improvement costs
- Operating expenses
- Maintenance and repairs
- Legal fees
- Property inspections
- Real estate taxes
By knowing how much you can spend, you won't waste valuable time searching for a home that will put you in the red. However, it is essential that you stick to this robust allocation.
3. Location, Location, Location
Location, location, and location are the three most influential elements in real estate. You can improve the layout of a house, change its interior, and give a facelift to the outside. Yet, you can't pick up a home and change its position.
Studies show that people have three priorities when buying or renting a home. They are public transport, education outlets, and basic amenities. You can justify a higher price by purchasing a property near these establishments.
4. Thorough Tenant Screening
Problematic tenants are arguably the most challenging hurdle for a landlord to overcome. Issues such as no rent payments, property damage, and violations of lease terms can all occur. It can even go as far as legal disputes and handling evictions.
It may not be a walk in the park, but thorough tenant screening is the key to unlocking a bright future. Inspect the potential renters' history, credit checks, and employment states. Don't forget to speak with previous landlords to ensure they were respectable tenants.
5. Consider Property Management
Generating significant income is the goal for most landlords. So, it is no surprise that many newcomers avoid hiring a property management service.
Contrary to popular belief, a property management service can boost annual revenue. They use expertise for tenant acquisition and retention. As a result, it ensures your home is occupied throughout the year.
Also, managers have local knowledge to get the best deals on contracting services.
There are countless ways a property manager can save you money. But they will also save you time and hassle. They will manage day-to-day tasks so you can spend more time with family or work commitments.
6. Regularly Inspect the Property
The average household spends around USD 6,000 on home maintenance annually. But your unwanted bills can drastically increase if you don't inspect the property.
A maintenance checklist will help ensure you don't miss any issues. Some of the most notable features to include on the list are:
- Electrical systems
- HVAC systems
- Exterior upgrades
- Safety checks, such as smoke detectors
The longer you wait to address the problems, the more the costs will rise. You could face legal action for potentially putting guests in danger.
7. Cash Flow Analysis
Conduct a thorough cash flow analysis to ensure the property generates positive income. Otherwise, you fall into financial instability and struggle to repay any payments.
Account for a mortgage loan, property taxes, insurance, and maintenance costs. Aim for an income that covers these expenses with a buffer for unplanned situations.
A general rule is that the cash flow should be at least 1% of the building's costs. For instance, if a property costs USD 250,000, you should earn a minimum of 2,500 monthly.
8. Build a Strong Landlord-Tenant Relationship
Communication is the primary ingredient in a relationship. Contact is so valuable that workers cite poor communication as the cause of 86% of concerns in their jobs.
When talking with your tenant, maintain a friendly yet professional tone. Assure them that you are available if emergencies or general queries ever arise. Additionally, be transparent and honest in conversations to avoid misunderstandings in the future.
Staying in contact shows that you are a respectable landlord. But you must also appreciate the renter's privacy and give them at least 48 hours to view the home.
9. Consider Networking
Networking has become a buzzword in the 21st century. However, it is one of the simplest yet most effective tips for advancing in real estate. Around eight out of ten employees say networking contributed to their success.
In the 21st century, you can utilize this tip from the comfort of your home. Many real estate forms are online, and even some for Concord, NC. Here, you can share ideas and give each other feedback on market trends.
If you prefer traditional ways, attend meetings or contact investors and property managers.
10. Be Patient and Strategic
Finally, the basics of investing involve a patient and strategic approach. So, avoid making impulsive decisions based on short-term market fluctuations.
Instead, focus on your long-term goals and stick to your investment strategy. Be prepared to weather economic cycles, knowing that housing is a long-term investment.
Consider Investing in a Real Estate Rental Property in Concord, NC
Every year, real estate is in high demand. In 2024, Concord will be one of the most sought-after spots for investing in a real estate rental property. The only downside is the tough competition you face from competitors.
If you want a competitive advantage, hire Bottom Line Property Management and work with a brand with over 55 years of experience!