Investing in Austin Real Estate
Investing in real estate takes a lot of research and consideration, but it’s worth it. Here are some fundamental tips on how to get started:
Pick a Great Location
If you’ve ever heard someone say that location is everything; they knew what they were talking about! A great location is essential to the success of a rental property. To choose the ideal location, pick a property close to major roads, public transportation, local community amenities, and great school districts. Know what market you’re trying to target and choose a location that will speak to them and their current wants and needs.
Research Rent Prices
Once you’ve chosen an area or maybe a few specific neighborhoods, research how much properties in the area can charge for rent – both as-is and with repairs and improvements. Determine the actual value of the property – overestimating the value will just lead to vacancies or a lower rent than you originally thought. Also, look at the current vacancies of the area. Are other owners running specials to entice tenants? This may be an indicator that the area is in a slump, and it’s been difficult to keep tenants.
Crunch the Numbers
Treat your investment as its own business and run the numbers before committing to the project. Accurately estimate rental income and ALL the costs associated with renting. Contact a property management company or REALTOR® to determine a fair rental value and take into account all monthly expenses associated with the property. Account for vacancies, turnover, and eviction when running the numbers – as landlords should assume at least a month’s rent loss annually. Save a hefty rainy day fund for the unexpected, like repairs and maintenance.
Know Your Target Market
Get inside the mind of your target audience. Considering what your target audience is looking for will ensure your rental property is in high demand. A high demand property is less likely to have vacancies.
Don't Over-Renovate
Don’t spend too much money renovating your investment property as you will likely have to pay for repairs on those items in-between tenants. To ensure your property is appealing to renters, complete basic renovations and make sure you’re choosing paint, hardware, and flooring that won’t be too costly to repair or replace in case there are damages.
Carefully Select Tenants
Use a rigorous screening process to choose potential tenants. Thoroughly screening applicants will ensure you have qualified tenants that pay rent on time, give notice about moving/needing maintenance, and will treat your home like their own.
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