Are you ready to own?

The concept of owning an investment property can sometimes be simple. For example, the investor buys the house, puts the house on the market for rent, tenants come in, pay every month, and thirty years later they own the house clean and clear and get even better cash flow.

If only it were that simple.

Some investors, especially those just starting out, don’t realize how much effort it takes to lease a property. In fact, many other investors often bought investment properties from new investors at a deep discount because the new investors found they couldn’t handle the work involved.

Property is like any other business. It is not something to take lightly. One of the most important keys to doing property right is putting the right people on the property.

Sure, when there’s an opening, the pressure to put someone on is extremely intense. After all, in most cases, the investor has to maintain mortgage payments while the house is empty. A month or two and all of a sudden the investor would start trying to put anyone on the property.

Screening a tenant is extremely important.

To make sure you find the right tenant, you need to screen them thoroughly to make sure you have the right person in their place. Many professional managers would run a background check, credit check, tenant history, income verification, and even inspections on your current residence to make sure the tenant is the right one and will pay on time.

Background checks are not always perfect. Circumstances change. What makes a good tenant one year doesn’t necessarily mean the tenant will be great the next. Knowing how to deal with a problem tenant is also an important learning process.

For example, you’d better understand the fair housing laws in each state to make sure what you’re doing is legal. You should also familiarize yourself with the eviction laws in your state. Equipping yourself with the proper knowledge will give you a much greater advantage when negotiating with tenants on any issue.

Don’t put off maintenance

Nobody likes when something breaks. But as the owner/property manager, your job is to make sure everything works. A leaky faucet could cause mold in your home over time. Either a leaky roof needs to be repaired or the tenant will get tired. It takes a bit of a toll on cash flow, but keeping a tenant happy will ultimately pay you more than you would get if you refused to take care of the property.

Hopefully these ideas will prepare you on how to own. While there is a lot of work, the rewards will also be great.

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