I’m a big proponent of investing in real estate as part of your overall investment strategy. It can be a financially lucrative way to diversify your funds, earn monthly income as well as generate equity from increased property values over time.
That said, it’s not for everyone.
Things to ask yourself if you are considering becoming a landlord:
-If this was a home you previously lived and loved in, are you ok with how someone else may not take care of it in the same manner that you did?
-Do you have funds set aside in order to handle maintenance issues should/when they come up?
-Are you local enough that you can handle the management of the home without hiring a property manager?
-How would you feel and how would you handle a call in the middle of the night that there is a broken toilet, leaking roof or dead lightbulb…(remember some folks call 911 to complain about the silliest things, you’ll get crazy “emergency” calls too.)
-Are you comfortable handling the conversation with the tenant when the rent is late, missing or check bounced?
-What if they have children, an illness, an ailing parent and payment was late, very late? How would you handle? Can you afford to be charitable? Would you be straight business?
-How much do you need it to cash flow for you?
-How will this impact your taxes?
-If you are thinking of renting it on a short-term basis, does your city or HOA allow for that?
-Are you aware of 1031 tax exchange programs?
-What does this investment strategy look like for you five years, ten years from now?
Some of these questions you will likely need the guidance of a real estate professional as well as a tax expert. When you are ready, I’d be happy to take you through the real estate side and look for properties that meet your needs both short and long term.
You can reach me at 949-378-5690 or firstname.lastname@example.org. Find me on Facebook at www.facebook.com/meredithdrews or on Instagram at meredithdrews_realtor.