Many people are now turning to real estate investing. Its amazing tax advantages, higher returns, and inflation-hedging features make it an excellent choice for first-time investors. But investing in real estate has its own challenges.
Whether you are ready to take the risk or already have a few investment properties in your name, it does not matter. There are things that you can do to enhance your profit-making abilities. You can do this by avoiding the following mistakes at all costs:
Buying a property in a bad location
One good way to lower your chances of increasing your profit is by investing in a property in a bad location. If you choose to buy a house that is in a bad neighborhood, you will not be able to rent it out at a good price. Make sure to choose a worthy property built by reliable builders. There are lots of land for sale in Townsville, where quality investment homes are located.
Accepting the first tenants who knock on your door
When renting out an investment property, your concern is not just to ensure that your tenants can pay their rent on time. You should always make it a point to do thorough tenant screening. Failure to do so can lead to a massive financial headache. You could end up accepting a late-paying tenant, one who disregards your lease agreement, or a potential health or safety threat to your other tenants.
Failure to fulfill your role as a renter
Each state has its own regulations when it comes to residential tenancy. Take note that regulations vary from one state to another. But as a renter, it is your responsibility to make sure that the property is safe and can serve its purpose. Make sure that you inspect your investment property regularly to abide by the Residential Tenancies Act (1997).
Making poor renovation choices
Certain renovation projects can help increase the value of your property. But not all are guaranteed to help you increase your rent. This involves DIY renovations, pools, hobby rooms, and even customized renovations. Stick to the basics such as adding a walk-in closet, improved furnishings, and open concept designs. These are guaranteed to add value to your investment property.
Saying no to pets in your property
Most landlords do not like pets since some pet owners are not responsible enough. But allowing pets can actually help you capitalize such need. You can charge additional rent for their pet, and make them sign an agreement listing their responsibilities as a pet owner. Take note that according to the Fair Housing Act, service and assistance animals are not pets. This means that you cannot ask tenants with such animals to pay extra rent.
These are five mistakes that you would want to avoid if you are a real estate investor. If you wish to maximize your profit, avoid the items listed above. Be a responsible renter and make wise decisions. Only then can you make sure that you are making the best decisions for your investment property.