As a new investor in Tampa real estate, you’ll probably have a lot of questions and need a lot of resources. Smart investors – even if they’re new – will surround themselves with experts who can help with everything from identifying the right opportunity to locating reliable vendors to placing excellent tenants.
If you’re preparing to purchase a Tampa investment property or you’ve already closed on your deal and you’re wondering how to handle everything that comes next in the rental process, we have some tips and tricks that are sure to help you.
As you probably already know, owning rental real estate can be lucrative and rewarding. But, it can also be challenging and risky. Here are five tips that will lead to a much better investment outcome.
1. Prepare for Negative Cash Flow Initially
You aren’t going to get rich quick with rental real estate in Tampa, and you should be suspicious of anyone who promises this result. There’s a good chance you’ll actually lose money every month for the first year of your investment, and that’s okay. This is especially true when you have a mortgage, as most new investors do.
Think about your real estate investment the way you think about a 401(k). You’re investing a little bit of money each month because you know the final result will be some impressive returns and high ROI.
2. Treat Your Rental Property Like a Business
It’s easy to get emotionally involved in the property you’ve just bought. There’s a lot of money invested, and money tends to be an emotional thing. However, you need to make every decision based on business sense rather than feelings, instincts, and emotional triggers.
This is not a home you’re living in yourself. It’s an investment. When you treat it like a business, you’re going to have a more successful and profitable experience. Let logic and data lead the way.
3. Budget for Maintenance and Turnover Costs
You have to have a budget and a plan for maintenance and repairs. Even if you buy a property that’s new and in perfect condition, tenants living there will be wear and tear and things are going to break. Systems and appliances will need to be replaced. You need a maintenance reserve fund so the expenses aren’t a shock, and you also need a plan for preventative, routine, and emergency repairs.
When it comes to turnovers, you also have to be prepared. The turnover period is a great time to check for any deferred and lingering maintenance items that need attention. You should also consider in updates and improvements so you can offer an attractive and modern property to your next tenant. Try to have a larger turnover budget than you’ll actually need. This will give you some flexibility when it’s time to make the property ready for the rental market again.
4. Pay Attention to the Tampa Rental Market
It’s easy to rush into overpricing your home. This is dangerous; it will only create a longer vacancy and attract under-qualified tenants who have been rejected at competitively priced properties elsewhere.
Listen to the market. Study what similar properties have recently rented for in your neighborhood. Trust the data provided by Tampa property managers when you’re pricing your home, and don’t be stubborn about rental value.
5. Hire a Professional Tampa Property Management Company
Successful investors are quick to hire a Tampa property manager before they even close on their rental property.
A professional management company can help you save money by reducing vacancy expenses, placing better tenants, and responding to maintenance issues with professional and licensed vendors. Your property manager has the tools and resources to screen tenants better, collect rent on time, and enforce your lease. Your investment property has the potential to do better, so let a professional help you.
We can be your professional support system when it comes to Tampa property management. Please contact us at Hoffman Realty.