The process of purchasing and maintaining rental real estate can be rather demanding. Here are some helpful hints for handling situations that may arise.
Hint #1: If the property you are considering has, according to past history, not been successful in locating tenants and keeping the property 100% occupied for long periods of time, don't buy it.
Hint #2: If you are going to manage the property yourself, obtain some standard forms, such as rental applications and agreements that lay out the terms of the rental and contain key pieces of information about your tenants.
Hint #3: Drop by unannounced on occasion to look at the condition of your property. If the condition doesn't meet your expectations, take action.
Hint #4: Make sure you have an emergency reserve fund and a diversified portfolio before adding real estate to your holdings.
Hint #5: Don't get into a bigger piece of property than you have the time to handle. The more tenants, the more time it will involve.
Hint #6: Hire an accountant to prepare your tax return to ensure compliance with IRS rules, which can be complicated and change from year to year.
Hint #7: If you don't have any experience with rental real estate, start out with a small property and go from there.
Hint #8: If you decide to invest in a piece of property with a partner, draw up an agreement between the two of you outlining each partner's responsibilities.
Hint #9: Give yourself a chance to get used to being a landlord before hiring a professional manager, unless the property is overwhelming.Hint #10: Look for an affordable property with good prospects for appreciation.