Are you an investor wondering how many properties you should buy and how fast? Buying one rental property per year is an investment strategy that several landlords follow. However, it’s important to make smart investing steps to get there.
Why Is Real Estate a Good Investment?
If you’re a seasoned investor you already know that investment properties are a great investment to generate long term wealth. But if you are new to investment property ownership you may be wondering why or how. It takes time, dedication, and capital to purchase and manage rental properties. That said, the benefits often make that all worth it.
For example, rental property investment can allow you to generate passive income and earn tax benefits. Plus, real estate offers a bit of stability compared to other investment strategies. Home prices may fluctuate, but not nearly as much as the stock market.
Now you may be wondering how to get started in buying one rental property investment per year, follow these steps.
Steps to Buying 1 investment Property Per Year
Buying one investment property per year is a strategy used by investors who want to gradually expand their portfolio of properties. When you buy too many properties at once, it can become overwhelming and too difficult to manage.
Here are some tips:
1. Focus on One Property Type (ex: single family homes)
2. Stick to Your Budget
3. Keep Track of Important Variables (extra costs)
4. Utilize Real Estate Tools to Find Properties
Is This Beneficial For Long-Term Wealth?
Buying one investment property per year can be an excellent strategy for any investor willing to put in the work. After all, once you buy the property, you become a landlord with several responsibilities. If you own several rental properties already and you need help managing them, contact the best property management company in DFW (All County Property Management Group).
Here are some of the benefits of buying one rental property per year.
• It’s Simple and Easy to Implement
• You Can Generate a Good Income
• It’s a Proven Way to Build Wealth
• You Can Handle Investment Loans More Efficiently
Maximize Your Business With Property Management
Investors with multiple rental properties are faced with several daily tasks to complete. Sometimes, there’s just not enough time in the day to get everything done. We are here to help! At All County Property Management Group, we help not only renters find their next home but also property investors looking for an experienced property management company to take over the hard work of property management. We offer up-to-date listings to suit a variety of needs and budgets. In addition, our dedicated leasing staff works with you every step of the way so you can feel confident in your home choice. Plus our team handles all property management needs from maintenance, leasing documents, marketing and much more! For more information or to see our available listings in your area, check us out today.
One of the biggest mistakes rental property investors can make is underestimating monthly expenses. Doing so can not only cause cashflow problems but may also cause you as an investor to lose far more money than you can afford. By learning how to correctly estimate your rental property expenses, you can better predict your monthly cash flow and keep your investments thriving.
Investing in rental real estate has a number of advantages. For example, the returns on rental real estate are highly predictable, allowing investors to be able to predict cash flows and returns on properties before they buy it. However, to invest with that level of certainty, you need to be sure that you are accurately estimating your properties monthly expenses.
Calculating Cash Flow
Estimating your cash flow consists of a lot more than calculating your mortgage payment to base your rental rate. Your monthly rental expense number should include several important costs. For example, all properties will require regular maintenance and repairs. While some rental homes may go months or even years between repairs when they do occur they can sometimes be very expensive if left too long.
This is why you should budget a certain amount for property maintenance every month. Don’t forget about the costs of preparing the house for new tenants and regular improvements such as paint, carpet, fixtures, and appliances. These will all need to be updated and replaced over time. Setting aside a certain amount in your budget for these items long before that day comes can guarantee that you have the money you need when you need it.
Including annual expenses into your monthly calculations is also important. For example, payments for property insurance and property taxes may not be made every month, but you should still include them in your expenses. The one thing you definitely want to avoid is forgetting to include these expenses in your budget and being surprised when the payment is due.
Another unfortunate monthly expense, and one that is often overlooked by investors, is unexpected vacancies. Although it is not a monthly bill you will pay, your vacancy rate will still have a real effect on your properties’ cash flow. Prepare for this by setting aside money monthly so you are prepared for when and if this happens.
Property Management Costs
The smartest thing you could do for yourself and your investment properties is to hire a property management company. This does come at a cost, however, it will ensure you run in to less issues later on down the road. A property management company will know what to prepare for. These fees for their services range between plans and companies but All County Property Management offers competitive rates and amazing services for all property investors.
Finally, don’t forget about the other costs related to owning and managing a rental property. Over the span of your investing business, you will likely need to pay for things like travel to and from your properties, accounting and bookkeeping services, eviction filing fees, court and attorney fees, tax preparation, application reviewing and so on. Again, while you may not have these and other miscellaneous costs on a monthly basis, it is important to include them in your monthly budget anyway. Failing to do so could have serious consequences for your future profitability.
You can just hire All County Property Management Group. We will take the guess work out of preparing for your monthly expenses! We will also help set your rent rate based on the current market, and your monthly expenses. We make owning an investment property a breeze.
At All County Property Management Group, we help not only renters find their next home but also property investors looking for an experienced property management company to take over the hard work of property management. We offer up-to-date listings to suit a variety of needs and budgets. In addition, our dedicated leasing staff works with you every step of the way so you can feel confident in your home choice. Plus our team handles all property management needs from maintenance, leasing documents, marketing and more! For more information or to see our available listings in your area, check us out today.