Are you considering investing in Orlando real estate? If so, it's important to understand what you're getting yourself into before getting started! There are a lot of decisions to make and things to consider.
This blog post will give you ten things to think through before investing in Orlando rental properties. From how much money you should have saved up for a down payment on your first property to what type of real estate is best suited for investment—our Orlando FL property management experts will cover what you need to know in this Real Estate Investing 101 blog!
1. Are the Benefits Enough?
What are the benefits of a real estate investment? Are they enough to get into it and make it worthwhile? No matter what real estate investing strategy you choose, the benefits should be enough to outweigh the costs. You don't want to get yourself into a situation where it starts taking over all of your financial resources (and time) just because you're hoping that one day it will pay off!
2. What Is the Process of Buying a Property?
Do you have all your financing lined up before beginning to search for properties, or are you going to finance once it's found? Is buying an investment property the same as purchasing a primary residence?
Before investing, work with a real estate investment expert to research mortgage types, discuss down payment recommendations, and walk with you through the process of buying an investment property.
3. What Are the Top Things To Consider When Looking At Potential Properties?
When you're considering a real estate investment property, there are many factors to consider to make a smart decision! These factors include:
- Location and proximity to restaurants, retail, schools, and transportation
- Number of units vs. a single-family home (and the work required to maximize occupancy and ROI for either one)
- Condition of the house, including square footage, age of appliances/furniture
- Potential hazards to human health that would need remediation before investing
- Your objectives: long-term vs. short-term rental?
A property manager can help you analyze these aspects of a property you have your eye on and how they will affect potential rental income.
4. What Are the Different Types of Properties?
Owning real estate investments doesn't mean you have to buy single-family homes if that's not the best fit for your goals. A property management company can help you consider Orlando duplexes, condos, or apartment units (or buildings) to determine the best investments for your financial success.
5. How Will I Manage Rentals?
Benefiting from rental properties requires experience and knowledge. One of the best ways to manage rentals is by hiring a property management company—especially if this will be your first real estate investment! Property managers can take care of everything from handling tenants and collecting the rent to being there for emergencies and repairs.
If you plan to manage properties on your own, make sure you understand everything involved with the daily work of operating rental properties.
6. What Are the Risks?
Owning rental properties is a relatively low-risk way to invest compared to other investment opportunities. However, there are risks! You could lose your rental property to foreclosure if the tenant stops paying rent or damages it. Your returns can also suffer from vacancies, unexpected disasters, or not having the right insurance coverage. A property manager can help you understand the risks and put strategies in place to minimize potential loss.
7. What Are the Ongoing Expenses?
Rental income isn't pure profit! Make sure you understand the ongoing costs of operating a rental, including HOA fees, mortgage payments, property taxes, insurance costs, maintenance expenses, and more. A rental market analysis can help you estimate how much rent you can charge to stay competitive while covering your costs and maximizing ROI.
8. When Will I Make Money?
When thinking about how to start investing in real estate, remember that it's a long-term investment strategy. Generating consistent cash flow and rent rolls comes with hard work, the right strategies, and expert guidance. If you expect to become a millionaire within a year after buying your first rental, you might be disappointed.
9. What Resources Do I Need?
Aside from startup money for a down payment, learning about how to get into real estate investing starts with information! Take time to read books, listen to podcasts, and consult with a property manager to understand more about the industry and how to make it work for you.
10. What Are My Real Estate Investment Goals?
Why become a real estate investor? Are you looking for an extra passive source of income, building your retirement fund, or hoping to replace your full-time job with real estate income? Whatever your reasons, make sure rental property investing is the right way to achieve your goals.
Get Started In Real Estate Investing With Expert Property Management Help!
It’s easy to get overwhelmed by the sheer number of decisions that need to be made when you want to invest in real estate. You may find yourself wondering what questions you should ask and how much information you really need before making an investment decision. A property manager can help answer these questions while also providing insight into potential risks and rewards associated with investing in real estate. If you're ready to get started, Verandah Properties is here to help! Let's talk about the best way to invest for your goals.