If you find yourself thinking about purchasing an investment property in Orange County it is likely an exciting prospect to contemplate. Adding to your financial portfolio through real estate is often a good idea, but it is always important to make sure you are an educated buyer who is ready to make this commitment before moving forward. Be sure to do some homework to ensure that your investment is a success.
Orange County is a great area to invest and if you approach it responsibly and with some forethought you are likely to be happy you chose to do so. Just remember this means you will be a landlord and being sure it is managed properly is an important factor in creating a financially viable endeavour.
- Create a Budget
Probably the most important aspect of any property investment whether it be a rental property or your home is your budget. You will want to take some time to run the numbers looking at what the current rental market looks like, and how much you have to put into another property. Make sure to have some money set aside in savings for maintenance. Do not go over your budget when buying a rental home.
- Hire a Realtor Experienced in Investment Properties
When you are house-hunting for an investment home it can help to work with a realtor who is experienced in this. There will be different considerations to think about compared to when buying your residence. A good realtor will know what it a good rental home and which ones are less suitable. They will know the best areas to invest in and be able to provide you with a knowledge of the Orange County rental market.
- Know the Rights of Landlords and Tenants
Different areas have different tenant and landlord rights so it is important to be well versed in this before putting yourself into the market. This way there will not be any misunderstandings or issues that can occur because you may not know what your responsibilities are as a landlord. There should be plenty of information available if you look into it. You do not want any surprises after the fact so be sure to do your research.
- Buy in a Healthy Rental Market
Working with an experienced and professional realtor can help you here as they will know the market and should be able to steer you in the right direction in regards to which neighbourhood you will buy in. Some Orange County neighbourhoods are geared more to renters and it is important to buy in one of these. As a landlord you want to be able to fill your property easily with good quality renters.
- Steer Clear of Fixer-Uppers
While it may be tempting to buy a fixer-upper property because of its lower price tag, believing you can put a bit of work into it and slap on a paint of coat be aware that when it comes to such homes this is not always the case. Fixer-uppers can become money pits if you are not careful. Also, you want to start collecting rent as soon as possible and if you are renovating you are missing out on rental payments.
- Research Property Managers
If you are planning to take on the responsibility of dealing with the tenants on your own you do not need to worry about this. However if you are planning on hiring someone to do it for you be sure to find one who is experienced and has several good references. A good property manager is key as they will put in good tenants and keep on top of things for you. Ask around and make sure you use a reputable company.
- Set a Reasonable Rental Rate
It is not always easy for renters to find good rental properties in some neighbourhoods of Orange County so choosing to set your rent on the higher end can seem like a good idea. One thing you may want to think about though is that you are likely to have longer-term tenants who pay their rent on time if you set it slightly below the average.
- Find Yourself a Good Handyman
If you do not keep up the maintenance on your investment property it will slowly start to fall apart and will leave you with costly repairs in the long run. Have a professional handyman ready for when emergencies happen and who can also stop by the house every few months to make sure everything is in order.