Rental Property Investment can be very alluring, particularly where properties for rent are concerned since there is the potential for a consistent stream of income. Be that as it may, some new real estate investors could use some guidance and care of to get to this stage of success.
While real estate investors can generate what feels like passive income with such properties, that return on investment requires property management and the ability to balance steady profits vs. repairs and maintenance.
Tenant relations, property taxes, and eviction laws are just a few issues and concerns that may come up for a Windsor property. Below is an easy-to-understand breakdown our property management professionals put together of the top 5 rental property investment tips you want to keep in mind as you start your rental property investment journey.
Tip 1: Familiarize Yourself with Landlord/Tenant Laws for the Location
It only takes one good person to make your property their primary residence for a long time to keep you in a good financial position. The Landlord / Tenant relationship can be mutually beneficial when things are working well. However, many landlords who rent any residential rental property will tell you the sailing is not always so smooth.
Things can get messy, from unexpected maintenance costs to security deposit challenges to evictions and more. It’s non-negotiable for you to understand what the landlord-tenant laws are since they govern the actions that both the tenant and the landlord can take in Ontario Canada.
Taking one wrong step could lead to legal action against you (The Landlord) and steep payouts that would disturb the positive cash flow you’re likely trying to create. Some Provinces are more landlord-friendly than others, which makes investment opportunities in those locations pretty attractive. In any case, ensure that you understand how the relationship between you and your tenants is meant to work legally before you commit to any rental property investments.
Tip 2: Outsource the Management Elements of Investment Properties
This is quite literally why Maximum Property Solutions is here. Even managing single-family homes is hard enough, let alone multiple properties at once. From staying on top of rent to handling maintenance requests to taking the right steps in a bid to keep vacancy rates low, it’s not an easy road.
There’s also a lot to be said about having the benefit of experience on your side since doing so can lead to a more streamlined process. Many of the most successful rental property owners will use a property manager for rental services and this is for good reason. After all, do you want to have to manage all the day-to-day operations of each property by yourself?
A part of financial freedom is allowing you to earn more, while you focus on more strategic elements of the business and not being tied to physical labour. Having professional property management services at your side means that maintenance, showing, leasing, turnovers, financial documentation, compliance assurance are all handled on your behalf and in your best interest.
Tip 3: Real Estate Investments Should Not Account for Your Entire Portfolio
This one goes without saying and is a lesson you want to take with you even beyond the scope of investing in any residential or commercial property. It’s no secret that investing can be incredibly rewarding, especially considering the limitations of the current job market.
Be that as it may, you need to be smart with your investments and ensure that your decisions align with a risk profile that is best suited to you. Remember that losses are just as possible as gains in this world. Fixed Mortgage rates are predictable since they’re set at the start of an agreement with a financial institution.
- What about the extent to which unexpected expenses disturb what should be your monthly income?
- What if it gets to the point where your investment doesn’t seem as lucrative as before?
- Do you just crash and burn?
To avoid that happening, you need to have a diverse investment portfolio. Remember that different factors affect the feasibility of different investment vehicles and any of them can take a turn at any time. Add some variety to ensure that you have some level of protection from losses.
Tip 4: Research Interesting Real Estate Markets Well
The average monthly rent in a particular location compared to your expected mortgage payments can’t be the only deciding factor you use to consider investing in a particular area. A well-informed rental property investor is the one who will make the best decisions. Here are some questions to consider…
- What does public transportation look like for potential tenants?
- What kind of amenities are near your location?
- Are there College or University schools present?
- What do the walk-ability and safety elements look like?
- What other elements would attract a potential renter to the area?
Attractive rental markets are so described because they have these elements properly taken care of, which means that potential tenants are more likely to be attracted to the areas. Additionally, rental rates in such places tend to be higher. Bear in mind too that the appealing parts of short-term rentals and long-term rentals are different, though there is some level of overlap. For example, if you’re interested in investing in rental units for Airbnb purposes, proximity to attractions is essential.
Tip 5: Estimate What Your Rental Income May Look Like
Understandably, this isn’t the easiest thing to do as you can’t automatically know what your numbers will look like. However, there are steps you can take to get an idea of what to expect from rental homes in Windsor, Ontario. You can start with the real estate market costs and see how attractive the location is to potential renters.
- How low is the purchase price?
- Does it look like a good deal considering the property’s market value?
- What will be the operating expenses to consider?
- Is there any development or expansion projects near the area?
- Which way are the current real estate market trends moving?
What if you’re not too sure how to make these rental property investment considerations or cost calculations on your own? You should reach out to a professional team who have navigated these waters before. Look, you don’t need to have all the knowledge yourself as there are seasoned property management professionals in the market that can help answer all these questions for you and guide you in the right direction.
Start on the Right Path to Rental Property Investment with MPS!
When done right, rental property investments can be very rewarding. From strong operating income numbers to tenants with good credit scores who pay their rent on time, a well-crafted approach is the way to get the job done.
Maximum Property Solutions is here to offload all the busy work from you. High-quality services such as handling tenant concerns around the clock, proactive and responsive maintenance, preparing documentation, and even investment property opportunity identification are all here for you.
Speak to our team of experts to understand how we can help you optimize your rental property investment approach.