There are specific things you should ask a property manager before you buy an investment property. These are the same things that come up over and over. When owners ask them after the purchase is already made, the truths can be hard. Having all the information early will help you buy the right home. When you speak to property managers before you buy a property, ask them to talk to you about these important things.
1. Location, location, location. Consider where the piece of property is located. Get to know the demographics of the neighborhood and whether there’s a school close. Figure out if it’s near the water, parks, running trails or in a high rise. This information is important because it affects how you will market the property. Just because it’s in a neighborhood without high rental income doesn’t make it a bad investment property, you’ll just market it differently than you would market the home you find in an exclusive, gated community. Know the amenities and who your likely tenants will be.
2. As soon as you walk into a property, have your unbiased property manager tell you what needs to be done. Take a look at the smoke detectors, carbon monoxide detectors, plumbing, appliances and other things that you might not notice because the home is nicely staged.
3. Discuss upgrades. What you might want in a home might not be appropriate for a rental home. You might really love carpet, and your instinct will be to upgrade the carpet and get something really nice through the entire house. Your property manager will probably tell you that the high traffic areas are better with laminate or tile. There might be different upgrades that attract tenants more. Your property manager will understand the upgrades that are worth your investment. Look down the road so that if you have to sell the investment property, your improvements will have a positive impact on price.
4. Estimate the rent. Most investors want to know how much rent a piece of property will be able to earn. Rent is contingent upon the first three things we discussed; location, condition and upgrades. Take a look at what the ongoing maintenance expenses will be. Decide if you need a gardener or if there are other expenses you will need to factor into your rent. Estimate how soon you’ll need a new roof and when you’ll have to make other large repairs. Build costs into your property management structure.
5. Develop a good relationship with your property manager before you buy an investment home. You can learn a lot from a person just by chatting with someone. Walking through a home, you’ll get an idea of how your relationship will move forward and how your property manager thinks.
If you have any questions about selecting investment property and how to effectively benefit from the expertise a property manager can provide, please contact us at Estey Real Estate and Property Management.