If you’re new to real estate investing, you’ve picked a unique time to enter the market. Things are a bit more competitive than normal, and that’s good news for sellers. Inventory is low and demand is high, and that means you’ll need to be prepared to identify opportunities quickly and then act on them to secure the deal.
There are several things to consider as a new investor.
First, you should surround yourself with experts. Successful investors know that no one can do everything themselves. You need to put together a network of experts who can help you make smart decisions and set yourself up for success.
It’s also important that you know your investment goals. A lot of beginners jump into real estate without thinking about why and what they want to achieve.
Finally, make sure you’re prepared for the basics, like finding tenants and responding to maintenance. The best way to do that is with a fantastic Memphis property management partner.
Assemble a Professional Network of Support
Mistakes are easy to make when you’re new to investing, and the best way to avoid those mistakes is by working closely with a circle of experienced investors who can provide the tools, resources, and support that you need.
Talk to other investors. Get to know mortgage brokers, insurance agents, contractors and maintenance vendors, accountants, and attorneys. All of these professionals will be well-positioned to help you at every step of your investment journey.
Most importantly, work with a professional Memphis property manager. A lot of investors make the mistake of waiting until after they’ve purchased the property to start thinking about who will lease, manage, and maintain that investment. Your property management partner can advise you on what your rental value is likely to be and how much you’ll have to spend on repairs and upgrades before that property is ready for the rental market. Having this information before you buy will be extremely helpful.
Once you have the home, a property manager can help you market your property strategically, choose a great tenant, and facilitate a smooth leasing and move-in process. You can benefit from online rent collection, recurring accounting statements, and an up-to-date understanding of all landlord and tenant laws.
Put Together Your Investment Goals
When you’re ready to invest, you need an established set of real estate goals. Understanding what you’re hoping to accomplish, what your timeline is, and what type of properties you want to buy will ensure you’re making smart decisions and moving forward in a way that meets your financial needs as well as your short-term and long-term goals.
For example, if you’re interested in short-term vacation rentals, you’re going to invest in a very different property than an investor who wants to focus on long-term single-family homes in HOA neighborhoods that will appreciate in value over 15 or 20 years.
Decide what you’re hoping to achieve and prioritize your goals when you have more than one. This well-mapped plan will set you up for success and keep you from making impulsive decisions that don’t serve your needs.
Educate Yourself on the Rental Market in Memphis
Before you can invest, you need to know the rental market. Don’t start buying up properties without knowing how much you’ll earn on them, what kind of maintenance they’ll need, and who your pool of tenants will likely be.
Even when you’re working with a property manager, you need to know the basics of tenant selection and placement, routine and emergency maintenance, lease agreements, and security deposits. For example, the tenant you place will make or break your rental experience. If you allow a bad tenant to rent your home, you’ll find yourself spending more time and money than you want trying to collect rent, enforce the lease, and protect your investment property. A great tenant, however, will pay on time, communicate well, and help you take care of your home.
Responding to emergency maintenance is a no-brainer. When a tenant calls because there’s a flood or a fire or a tree that’s crashed through a window, you know that you have to respond immediately with a team of vendors. But routine maintenance should inspire the same sense of urgency. Taking care of even minor issues right away will make your tenants feel valued and important. This contributes to excellent tenant retention, which saves you money on turnovers and vacancies.
There’s a lot to know as you get started as a real estate investor in Memphis. We would love to help you have a better experience. Please contact us at RiverTown Realty, and we can talk about your investment goals and how our Memphis property management services can help.