BarronsPM has several owners who are investors in our area and are expanding to other areas of the county. What are some recommendations for BarronsPM on what to watch out for and what questions to consider before buying investment properties?
What area of town should I be looking at?
The best places to start are near military bases, colleges/universities and corporate areas. These areas get the highest amount of tenants looking for housing and when priced right, it will rent no question.
How much money can I make after mortgage payments?
One of the biggest mistakes an owner can make is to assume the rent rate will be the same as a mortgage payment or higher. Do not make this assumption. Rent is never based on mortgage rates or how much you want to net in income.
What is the estimated costs to upkeep a rental?
A general estimate is 10% of the yearly revenue should be put back into the property for maintenance during any given year. The major systems such as roof, hvac, water heater and plumbing and electrical should always be places as a priority over cosmetic updates like paint, carpet, light fixtures. It would never be a bad idea to make a contingency account for unexpected costs. Part of BarronsPM policy is a reserve account of at least $350, this is held throughout the month to cover maintenance costs that occur during the month, that are non emergency calls.
Barrons offers a Preventative Maintenance program, which assists in inspecting the major systems mentioned above, to learn more, visit us at BarronsPM.com