Given the continued low interest rate environment, many consumers and investors alike are taking advantage of this “cheap” money and borrowing to purchase big ticket items like homes and rental property.
But given that we are also in the midst of a seller’s market, is now really a good time to add to your rental property portfolio?
The answer is, it could be – but only after considering a few important parameters. For example, if a property is located in a desirable area, there’s a good chance that there could be a bidding war for it – even if it needs some fix-up. Therefore, creating and sticking with a specific budget is essential so that you do not overpay for a real estate investment.
Although it is oftentimes easy to let emotions get in the way (even when buying property that won’t be used as your primary residence), paying too much can impact your overall returns – in some cases, significantly. This is particularly true if you’ll need to also pour money into repairs before you can put it on the rental market.
Knowing how much rent you can realistically charge is another key determinant in whether or not you should pursue the purchase of another property. In this case, location definitely matters, as does the quality of the offering. For instance, you could offer the property with an outdated kitchen and bath(s), but be prepared to accept less in monthly rent.
If you own, or you plan to own, residential investment real estate in Orlando and/or the Central Florida area, and you want to free up more of your time from managing and maintaining it, a property manager could be a good solution. Contact Us if you’d like more details on how a professional property management team can work in your favor.