Investing in residential real estate properties might be one of the most lucrative investment strategies in real estate. Thus, here is what you need to know about owning and managing residential properties as a landlord.
Residential real estate investing is for those who want to succeed in real estate investing right away. Sure enough, it takes some work, and you have many responsibilities when it comes to managing those rental properties. So, make sure to read until the end for we are going to list our top blogs on residential real estate investing.
Related: Real Estate Investing: Why Is It Such a Great Choice?
Here is what you need to know about residential real estate properties:
First: Owning residential real estate properties
Sure enough, residential real estate investing comes with advantages and disadvantages. Here’s our own list of the pros and cons of investing in residential real estate properties:
Pros:
- Rental income: What could be better than having a steady monthly income? This is, in fact, what you get from investing in residential real estate properties.
- Appreciation: Investing in long-term residential real estate properties gives you the chance to benefit from appreciation. As long as you are holding the investment property, it is going to appreciate in value annually. Therefore, it means that you are benefiting both in the short term and the long term by generating a rental income while appreciating.
- Easy loans: It gets easier for landlords to get loans for residential real estate properties. This means that you will benefit from residential real estate investing in case you want a refinancing or you want to grow your real estate investment business.
- Tax benefits: When investing in residential real estate properties, you can benefit from tax deductions on interest and on any losses you suffer.
Related: Financing a Rental Property: What’s the Best Way?
Cons:
- Vacancy rates: There is a possibility that you might have your rental property vacant for a period of time. But it is all up to you. With the right marketing, you won’t have that problem for long.
- It takes time: It does take time to make a lot of money in residential real estate investing. Moreover, owning and managing residential properties takes a lot of your personal time. Therefore, only if you are willing to give up some of your personal time, residential real estate investing is for you.
- Bad tenants: Another downside of owning residential real estate properties is bad tenants. We do not mean that all tenants are bad, but there is a chance that you get to deal with them. Therefore, you have to be ready to deal with all kinds of tenants if you want to make money via residential real estate investing.
Second: Aspects of residential property management
Residential property management includes the following aspects:
Collecting rent: Managing your residential real estate properties includes collecting the rent on the date due.
Dealing with tenants: Dealing with tenants includes receiving their complaints and expectations as well as making sure everything is going according to the terms of the lease agreement.
Property maintenance: Property maintenance is part of property management. It is important to keep checking on the rental property in case of any repairs or improvements are needed.
Dealing with the legal aspects: The legal aspect includes the legal paperwork as well as evictions. Hopefully, you won’t have to deal with that, but it is still a possibility.
Keeping records: By records, we mean financial reports and records of the investment property’s status. This is important as they are required by the authorities. Moreover, they can serve you in case of any future legal procedures.
Marketing: Marketing and advertising your residential real estate properties is important. Otherwise, how are you going to keep your rental properties occupied and therefore make money?
Related: When Are Property Management Fees Worth It to Investors?
Third: Two ways of managing your residential real estate properties
Managing residential real estate properties yourself:
If you are a full-time real estate investor, of course, you can choose to manage your residential real estate properties yourself. In this way you can make sure everything is done the way you want it to be. However, keep in mind that it is a good idea if you already have experience in owning and managing investment properties. Otherwise, you might need some help.
Hiring a professional real estate investment management firm:
For beginner real estate investors and those who are investing in real estate part time, professional property management services are the perfect solution. A real estate investment management firm will provide you with professional services for running your business. This will save you time and efforts. Besides, you won’t have to deal directly with the tenants unless a situation that requires your presence arises. Other than that, you will get to rest assured that your residential real estate properties are taken care of by professionals.
Fourth: Mashvisor’s view on owning and managing residential real estate properties
Of course, we think that residential real estate investing is a lucrative business. It is worth the time, effort, and money you invest in it. Therefore, if you want to learn more about owning and managing residential real estate properties, here’s a list of blogs you can benefit from:
- Learn How to Become a Residential Real Estate Investor in No Time
- What Are the Major Incentives to Buy and Rent Residential Properties?
- What Are the Best Ways for Residential Real Estate Investors to Make Money?
- Residential Real Estate Investing Is the Best Investment Strategy There Is
- Investing in Residential Real Estate Is the Ultimate Way to Go for Beginner Investor
These, of course, are only some of the blogs we have on investing in residential real estate properties. You can find more blogs on all other matters related to real estate investing on Mashvisor. You can talk to our experts on real estate for advice as well. All you have to do is sign up for Mashvisor.