You don’t have to be at the mercy of a paycheck to live well and make money. That’s why buying an investment property is so big right now – you can have a stream of income without punching a timecard. But just like you would prepare for a job interview, you want to prepare to own an investment property in the Tampa Bay area. Here are some of the top things to think about when making an offer.
1. Home Maintenance
Renting out your investment property can be a passive source of income, especially if you have a property management company to deal with screening tenants, signing leases, and maintaining the property. When you look at the home – consider the bones of the house, and its working parts, like the pipes, the central air, the heating, and the wiring.
If the house is rundown or there are obvious problems, it will save you time, money, and aggravation to fix or replace things right away. You also need to factor in wear and tear, painting, carpet replacement, and other annual upkeep costs. Most leases require the property owner to be responsible for breaks or damage – unless it's clearly caused by the tenant – so be clear on what you’re legally required to do. Again, that’s where a property management company can save you hours of aggravation.
2. Yard Maintenance
Some leases – like those for single-family homes or duplexes – make the tenant responsible for maintaining the yard. Others, like leases in apartment complexes, make the landlord or property management company responsible for the landscaping.
Either way, don’t leave it up to renters to maintain elaborate, expensive, or high-maintenance plants. A hot, humid, subtropical climate like Tampa is friendly to lots of native plants like the sabal palmetto and the sea grape. Native plants look fantastic and require little water or maintenance. Even if a hurricane blows ashore, native plants are resilient and able to regrow rather quickly.
3. Return on Investment
Your ROI is a major consideration when you are buying an investment property. Home prices rose about 20% in the Tampa area in 2021, in part because of the number of investors snapping up homes. The marketplace is more crowded than it was just a couple of years ago, and if you’re looking to flip the property, consider that mortgage rates are rising as the Fed attempts to get a handle on inflation.
These market forces can seriously impact what you get out of your investment property – and buying a rental property may be one of the wiser courses of action right now.
4. Manage Your Expectations
Property investment has become more popular than ever, and the market is more crowded than it was just a few years ago. One in four homes bought in the Tampa area in 2021 was bought by an investor, and this is one of the factors driving home prices up.
The financial markets are also less certain lately, so tread carefully and know what you expect to get out of purchasing property. But if you know what to expect from both the purchase and the management of a property, you stand to make money for years to come.
Investing in real estate is an exciting thing to do that can become a passive income stream, if done right. The trick is to invest in the right properties and have a plan for them before you buy.
Paul Ryan is an aspiring novelist who supports his hobby with his investment properties. He owns three homes which he maintains himself and rents out. His biggest pet peeve? Tenants who don’t mow the lawn regularly.
