Rental property success is like putting together the pieces of a puzzle. Without everything in the right place, there is no way to reap the rewards of your efforts or generate the most profit from your investment. If you’re thinking about investing in real estate for the first time or are looking to expand on your current investment portfolio, consider these 5 tips from our expert Tampa property managers to help you maximize the opportunity to meet your long term goals and objectives.
1. SET REALISTIC EXPECTATIONS
You know the saying, “Rome wasn’t built in a day.” Well, generating profit from your rental property carries this same principle. When creating a profitability analysis of your property, write down all the variables that may affect your yearly gross income. It is important to account for vacancies, repairs, and other unexpected expenses. Being realistic will help keep you cash flow positive, and will help you maintain a safety net for the unpredictable moments that arise during your ownership.
2. DETERMINE YOUR ROLE IN MANAGING THE PROPERTY
Managing tenants, collecting rent, and keeping up with repairs can easily turn into a full-time commitment. If rental property is a secondary source of income, you may not realistically have the time to juggle all of the responsibilities that come along with the role. Even if investing in real estate is your only source of income, your time is valuable and may be better spent tending to other money generating ventures. Either way, it is always a good idea to consult with an experienced Tampa property manager and evaluate the benefits of having a company in place to take care of the details, so you can focus on the big picture of your financial goals.
3. BECOME FAMILIAR WITH STATE AND FEDERAL LAWS
As the owner of a rental property, it is important to familiarize yourself with laws related to property rental. For the State of Florida, these laws can be found in Chapter 83 of the Florida Statutes and cover everything from the procedure for evicting a tenant to your responsibility for providing a safe and secure living environment. Familiarizing yourself with these laws will assist in understanding your rights as a landlord and how to appropriately deal with a situation that warrants legal action against a tenant.
4. INSPECT THE PROPERTY PRE-PURCHASE
Purchasing rental property is a big investment, and it’s important to walk into the commitment with a full understanding of needed repairs before you buy. Never take a home at face value or a previous owner’s account of the home’s condition. From our experience as property managers in Tampa, we always recommend hiring your own third-party inspector to thoroughly evaluate the property. Being aware of needed repairs will also allow you to negotiate with the current owner, or back out of a deal if the repairs are too extensive.
5. CHOOSE YOUR TENANTS WISELY
The quality of your tenants can ultimately determine the success of your investment. To ensure you have a stress-free experience, take the time to sit down and meet with your tenants face to face. Then, conduct a thorough background check to look for past criminal activity, foreclosures, and employment verification. Don’t simply trust the information provided on their application, as it could be false or exaggerated. Also, contact references and previous landlords to hear first hand what they will be like once living on your property. In the end, this is your livelihood and you have right to know who will be living in your property whether it’s for 5 months or 5 years.
Being in a position to own rental property is an incredible opportunity, but it is important to understand not only the commitment that comes along with this new venture, but the little details that equate to success. If you are new to managing rental properties or just want a new perspective on how to better manage your time and investment, talk to a property manager in Tampa, FL.
Looking for an experienced property management company? Call us today at (813) 968-5665 for more information or request a proposal.