The idea that investing in real estate is a sure way to make some easy money is nothing but false. To be honest, the biggest and best reason to invest in real estate is to diversify your investments and not be totally dependent on the stock market. A real estate is technically considered a passive investment but that does not mean that your involvement stops after you write the check. In reality, that is when your biggest contribution begins. So before you rush to purchase your first Arizona rental property, consider a few factors that will have a big impact on the success of your investment.
If you are new to real estate, understand that there is a huge learning curve for you in this business. And understand that a mistake will result in a financial penalty or loss in most cases. So before your money is on the line, make every effort to learn as much as possible about the industry and the property that you are considering. Talk to other investors, lenders and especially real estate investment professionals. You can visit www.azrealestatewholesale.com learn more about the processes and what to expect during your first purchase. You can also speak to a professional who can offer you advice and expertise on your investment choice.
Consider your long term commitment to managing and caring for the rental property. You first task will be finding a tenant for the property and completing a screening process to know that you have a renter who is reliable and trustworthy. After that hurdle, you will need to maintain records of rent payments, pay the mortgage, keep the insurance up to date and attend to any maintenance issues that arise. If you do not want to deal with this day to day issues of the property, then be sure to budget in enough to cover the cost of a property manager. And while you are considering the cost of a manager, check and recheck all of your other calculations to be sure you have every expense accounted for and won’t have any financial surprised during the renovation process.
If you have decided that you are all in on this investment idea and are ready to be a property owner and landlord, then consider one last option, a multi-unit property. This would allow you to live on site. You would most likely be able to reduce your living expenses and still make a profit from the rental units. Having three or even four units rented in a single location would minimize your effort per unit and maximize your potential for profit. In addition, you are less likely to have damage caused by renters, issues with noise or disrespect of the property or neighbors and even possibly lower insurance as an on-site owner.
Having considered all of your options and the long term commitment of owning an Arizona rental property, you are now either ready to make the purchase or find a new investment option. But contacting an investment professional such as Arizona Real Estate Wholesale can answer many of your questions and help you to make the right decision for you and your lifestyle.