5 Steps to Buying a Woodland Hills Rental Property
Investing in a Woodland Hills rental property is a great way to add a new cash stream to your home and build a saving account for retirement. If you’re thinking about starting a new rental property venture, then there are a few things to know before you get started.
Here are the five steps to buying a Woodland Hills rental property.
Highlight Your Bottom Line
Never invest without a clear goal in mind. Whether you’re looking for additional cash, appreciation or the tax benefits that come with owning a home, you need to outline your goals and stick to them.
Adding cash flow is the safest bet. This is money from rental properties that comes once the monthly mortgage is paid. It can be used to supplement your own income or reinvested in new properties.
Some people like to hold onto rental properties and then sell them for a higher price, called appreciation. You usually have to hold onto the Woodland Hills rental property for a decade or two to really see appreciation, but it is a strategy, as is benefiting from the tax breaks of owning a home.
As you start, make sure you note your cash flow and make any buying decisions based on that number. Be conservative with any estimate, and you should stay on track.
Feel the Ride
Even before you make an offer, think about all the possibilities you may be starting. A Woodland Hills rental property is quite different from owning a regular property. You will have tenants, and you won’t be able to police them all day every day. Even if you have a property management company taking care of the place, you will need to step in now and again. You must be ready if something happens to your property.
It’s also a good idea to look for a property that you’d like to own for years at a time. That means finding a Woodland Hills rental property that isn’t falling down and won’t need extensive repairs over the years.
Go Over the Numbers
Rental properties aren’t about the upgrades or the tax benefits. What they really come down to is a game of numbers, and figuring out what your rent might be isn’t as easy as you might think.
You need to look at the market now and where it might be going to determine rent. The rent in the area may be high now, but what about in the future? Are there new developments going in? Are companies leaving the area and taking tenants with them? The market may fluctuate so you need to think about what may happen if the rent drops.
You also can’t forget about hidden costs, such as any utility expenses you might pay as well as repairs. Don’t be too conservative in this estimate.
Create a Team
A good team will help through the whole buying, renting and selling process. It’s usually composed of a realtor, property management company and contractor.
A realtor will help you find properties in your preferred area at your preferred price. If you decide not to manage your property yourself your property management company will see that your property has a tenant and handyman available. They’ll also take care of finding new tenants and managing your rent. If you decide to manage your property, then make sure you have a trusted contractor to help you do any renovations and repairs.
Figure Out a Tenant System
The best tenants make renting a breeze, but not all tenants are good tenants. If you’re managing your Woodland Hills rental property, then you need to establish a screening and application process to ensure your tenants will be able to pay rent on time and keep your property in good condition.
Decide on a strategy that will help you find good tenants and block the bad ones. This will make owning a rental property a breeze.