Being a landlord can be a tough job.
And it can be very rewarding, and profitable.
There are a few different ways to start investing in Real Estate. Here are two good ways to start.
- Buying a condo for rental requires the least from the owner because the condo association manages the common areas, landscaping and snow removal etc. I recently helped a long time client get started in Real Estate investment this way. About ten years ago I rented this couple and apartment that I managed. A few years later I represented them in buying a condo in Brookline. Last year they wanted to diversify their investments and start getting into RE. After talking about short and long term goals and the time they would have to available to handle property management issues, buying an investment condo was the way to go.
- The other way to start in Real Estate investments is by purchasing a two family and living in one unit and renting the other unit out. I have worked with first time investors like Adam and Diane. They rented an apartment through my office and then I helped them purchase a 2 family home. I am a huge advocate for first time home owners to purchase a multi-family. First time buyers are most likely to be coming from a multifamily home. So it’s an upward-lateral move up.
Some investors are happy with keeping things small and simple. They have a few units, keep the rents low, don’t have much turnover and are less engaged with the property. This approach is fine for some, but a substantial return is left on the table this way.
Others are more actively involved with the properties. Keeping rents at or around current market levels. They repaint and refinish the hardwood floors on a regular basis. The tenants leases are always renewed, paper work & interest on deposits are delivered and up to date.
Some investors can even be more active than the prior that I mentioned. They are proactive in maintaining the things tenants don’t notice. These items are the roof, boiler, electric system and windows. Some will take the opportunity to delead a unit if it’s vacant. These owners are always using all of their tax deductions to the maximum allowance. A 1031 exchange is a good friend to them because they will take the “runt of the litter” and trade up. That is sell the property that is not producing a good return and leverage the equity by selling/buying a new property with a 1031 exchange. By doing this the investor is able to defer capital gains tax and re-invest in a large or multiple properties. Strategies using 1031 approaches are great and within 15-18 years a Real Estate portfolio can become very large indeed.
If you have questions about investment property, I’m happy to speak with you.
Many thanks for reading and I’ll post more here in the future…