Many real estate investors can tell you that investing in single-family homes can be quite lucrative.Â When done properly with planning and wise execution a person can secure their financial future.Â Over time real estate has shown to be a safe long-term investment that can help build a solid financial portfolio but before you dive into investing in real estate you may want to know a few more details on how to manage the property and tenants.
Buying a home whether it be for personal use or as a rental can be very expensive.Â You want to determine how the home will be used and the type of market you wish to invest in.Â Typically, single-family homes do quite well in the rental market, however the rent must be what a person is willing to pay.Â A good way to maintain good flexibility in how much rent to ask is by the down payment you put on the purchase of the home.Â The more you put down the lower the mortgage payment will be hence you may be allowed to rent the home for a fair market price.
When setting your rent you will want to take into consideration insurance, fees, and association dues that you may be required to pay.Â
Even if you are buying a home to use a rental you want to make sure it is in good condition with all the appliances operational.Â Remember that many tenants won’t take as good of care as things as if the owner lived there.Â As the landlord you will be responsible for the upkeep of the main things in the home, such as; the furnace, air conditioner, roof, etc.Â
Finding the right tenant is critical to your success.Â This can be tricky, especially since you spend a short amount of time with the potential tenant and really don’t get to know them.Â It is always a good idea to run a credit check on applicants and it is okay to go with your “gut feeling”.Â
When it comes to renting out your single-family home you are responsible for the advertising, screening applicants, handling the contracts, the collection of rent, taking care of emergencies, making repairs in a timely manner, etc.Â If you don’t feel up to the challenge, don’t let this hold you back, you can always hire a professional real estate management company to help with the bulk of the work.