What makes rental property journey goes successful long-term? What do wise property investors do differently to make this industry consistently remunerative?
In one of the property investment seminar, there is a expert with many years of experiences in residential property investing and management, it is clear to this expert that there are certain practices and attributes which characterize successful property investors. After the summarization from the seminar, the following insights of residential property investment and rental renovation are offered for your consideration and reference if you want to be succeed in property investment field;
The 7 Attributes of the Wise Residential Property Investor
• Set a short and long-term investment goals and make sure these goals are realistic and clear
• Make sure you have positive cash flow
• Do a thoroughly research on the property that you plan to invest in
• Only buy the property that has a good location, high opportunity of appreciate in value, minimal repair requirements and of course, buy the property at as lowest price as possible
• Understand how to calculate the cash flow that can be derived from rental property investment
• Only invest in the rental property that can rent out easily e.g. property units nearby office building or university
• Remember to do the property maintenance once a year
The wise property investors would also be conscious of how scaled renovating/ remodeling can increase equity and maintain a good quality tenant base. Do keep in mind that only invest in the rental property that can generate the positive cash flow to itself. For example if the monthly loan repayment of this property is RM 1,500, and you have to make sure that the monthly rents can cover or above RM 1,500.
3 Renovating Precautions
• Make sure you have not over renovate
• The costs of remodel will usually need to be depreciated rather than deducted.
• Only do the renovation in off-season or when the unit is vacant
4 Main Reasons To Upgrade Your Rental Units
• It can maintain or increase its equity
• Able to attract the potential tenants that can give you the highest rent rates.
• Amortize the costs in preparation to sell
6 Most Cost Effective Property Improvements
• Paint, exterior and interior
• Thorough cleaning
• Beautify the kitchen and bathroom
• Install the new windows and doors
The savvy property investor is always practice to do their own thorough research, analyze and regularly review the financial data, buy the property in lowest price, generate positive cash flow for every each rental property, maintain and periodically upgrade the property and manage the tenants relationships.