If you’re considering the purchase of a rental or investment property, there are a few things you absolutely need to consider first. While many people see real estate , and more specifically rental property , as a surefire “get rich quick” scheme, the reality is far different. Owning a rental property often requires backbreaking property management efforts, extreme frustration, and stagnated profitability. That being said, this article is by no means intended to dissuade you from purchasing or investing in a rental property. Rather, through examining and breaking down the many considerations that any potential real estate investor should make prior to purchasing, it is our hope that this article will provide you with the necessary tools and perspective to successfully launch your rental property venture.
Charleston is experiencing a population boom. This has led many people to conclude that by merely purchasing existing properties they are guaranteeing profit for years to come. This is not the case. Rental properties come with a high level of liability and require tireless efforts to ensure smooth operation. Prior to considering a property for investment, be sure to familiarize yourself with the property taxes in the area. More than that, take a look at the tax rates going back a few years. The aim is to avoid areas with disproportionately high property taxes, but also to avoid areas that may be heading that way. By viewing the past tax data you can often form an idea of which direction the tax burden is moving.
Be sure to look at insurance costs. In Charleston especially, flooding can be an issue. Does your property sit low on the flood plain? Will flood insurance be a fixed cost that you will have to deal with for years to come? These “hidden” costs can often bankrupt a nascent real estate venture before it even gets off the ground.
And what about property management? Without a doubt, the most difficult and thankless job associated with owning a rental property is the day-to-day property management. From repairing a leaky faucet to letting in a tenant that may have lost their keys, calls can come at any time and there is no telling what the next crisis may be. For this reason, we often recommend that a new property investor enlist the help of a management company such as Rent Holy City. While you are just getting your feet wet in the real estate world it can be incredibly useful to have the foundation of a property manager’s years of experience to back you up.
While this article is a very brief break down of some of the questions and considerations any aspiring real estate investor needs to make, we hope that it has proved useful in some way. Whether you are just considering the purchase of a rental property, or are looking forward with expansion in mind, these questions require answers. With the help of a property manager like Rent Holy City you may just find the level of success that many imagine. Real estate investment is by no means a get rich quick scheme, but with proper planning and consideration, it can absolutely prove a lucrative venture.