Tips For Buying Rental Property

There are lots of benefits to buying rental property. There are some things to keep in mind though. You might be considering houses for sale in Bakersfield, CA but be sure to do your research on property management in Bakersfield too. Here are some things to keep in mind when buying rental property.

Is Buying Rental Property a Good Idea?

Buying rental property is definitely a good idea if you have the time, willingness, and skill to manage it yourself. If not, you might consider going with a property management company. It is not fully passive otherwise. You have to find tenants and collect rent. You have to be familiar with tenant laws. You have to handle legal documentation for things like leases or eviction. You also have to manage repairs. Over the long term, rental property compares favorably to stocks but this can vary over where the property is located and the specific property.

Hold On To You Property For the Long Haul

You might have a unit for over a decade and have it have the same two tenants and be very low maintenance, or you could have another that has had several in a couple of years and perhaps a costly eviction. The best advice is to stick with it for the long haul. Most people don’t have on to their investments long enough. Then hopefully you see appreciation.

Do You Have the Skills to Be a Landlord?

If you purchase rental property should you be your own boss with it or hire a property management company at 10% of your rental income? While there's no one size fits all answer, you may be more comfortable with a property management company instead of doing it yourself. This can free you up to manage your money, and not the property itself. If you get to close to tenants with financial difficulty you may have a hard time eviction them, as an example.

Save Money For Unforeseen Issues

There are many expenses with owning bakersfield rental property management and you should be saving 30% of your income to cover those expenses. You want to make sure you’re not just living off that money because then if there's a big problem that comes up you have no way to pay for it. People have a tendency to underestimate the expenses that come up and that can lead to issues. You shouldn’t overestimate your cash flow.

In Conclusion

Rental property can be a really good investment and there is a reason there is so much interest there. However, you need to keep in mind that managing rental properties can be a lot of work. You might want to consider a property management company if you do invest in rental property.