New investors looking for their first Ormond Beach rental property?
This is a unique time.
While the real estate market shifts quickly, we’re in the middle of one of the hottest markets we’ve seen in the last 10 years. Property is moving quickly.
With such a hot market comes a few challenges but also a lot of opportunity. As you set out to invest in your first property, consider these seven important things.
1. Establish and Stick to Your Investment Goals
Investment goals are an important way to get started and in a market like this, you may be tempted to abandon them altogether.
Write down the reasons you’re investing and what you’re hoping to accomplish. Having an exit strategy before you even begin might seem silly, but it’s a good idea. These investment goals should drive every decision you make. They will keep you on track.
2. Remember that this is a Business
It’s easy to get emotional about your first investment property in Ormond Beach. Remember that you’re not going to live in this property yourself. You don’t have to love it, and you don’t have to spend a lot of money renovating a home that would appeal to you personally. Think like a tenant, and invest in a property that will earn you consistent rental income and appreciate in value. This is an income-producing property, not your own personal dream home. Business decisions will generate a better outcome than emotional decisions.
3. Prepare for Competition
Florida is attracting investors from all over the world. This market is competitive, and new investors can feel a bit left out. Be prepared to move quickly when you find a property you want to buy. Other investors are aggressive, and they sometimes have cash in hand, ready to make an offer. Don’t let this rush you into bad decisions.
4. Educate Yourself on the Ormond Beach Rental Market
When you’re buying an investment property, you get pretty focused on the sales market. However when you’re buying an investment home, you also need to understand the rental market. Ormond Beach is a diverse and growing market. When you’re renting out a property, you’ll have to understand the tenants and trends of the local market.
Getting an idea of the market strengths and weaknesses will help you price your property competitively when you’re ready to rent it out. It will also help you market strategically and plan for upgrades and updates that will appeal to your best tenants.
5. Find a Great Ormond Beach Property Manager
Work with a professional Ormond Beach property management company before you buy an investment. You need an expert who knows the local market and understands the property management industry. Find a company that can accurately price the home, market it, and screen for highly qualified tenants.
Look for a management company that has good relationships with local vendors and has a reputation for helping owners earn more and spend less on their investment. A local management company will also understand all the laws, requirements, and best practices in Ormond Beach real estate and management.
6. Buy the Right Ormond Beach Investment Property
You don’t have to be an expert in real estate to understand the importance of location.
Location is an important part of your investment success. Homes in desirable neighborhoods and near good schools, commuter routes, parks, and recreation are going to rent for more than homes in remote or busy areas. The location of a rental property also has an impact on how quickly you’ll be able to rent out your property and the types of tenants you’ll attract.
Remember that you’re buying an investment property, and it has to be appealing to prospective tenants.
7. Do Your Investment Math
A lot of investors get excited about a property and they sign on the dotted line before they really run the numbers. Do your math. Several financials are far more important than the property’s purchase price. For example, you’ll have to know how you’re paying for the investment. What kind of leverage are you going to have and how much cash are you able to put down?
Make sure you can meet any lending requirements, and have a plan in place for how you’ll finance your real estate purchase.
Measure your expected rental income against your anticipated expenses. You’ll need to factor in the mortgage payment, insurance, and taxes. But, you’ll also want to budget for maintenance and rental property vacancy. Don’t forget to include your property management fees and other professional services.
These are seven things to consider when you’re buying your first investment property. If you’d like some help with your Ormond Beach investment plans, contact us at Oceans Luxury Realty.