Investing in any type of rental property for the first time can be a frightening experience as you begin to realize just how little you know about the process and how much there is to do, but we at iHost Property Management think it’s ok; you’ve got this. Especially since you found your way to our page and our first time buyers guide to temporary housing properties, a topic we are passionate about as well as being one that we have more than a few minutes of experience with. So, for the next few minutes we invite you to sit back, pour yourself a beverage, and discover how quickly you can relax about making the largest investment you have made so far and remember; you’ve got this!

The 2 Percent Rule

If you are thinking of purchasing property, chances are you already have something in mind, and perhaps the most important rule of all is the 2 percent rule. Spelled out, the 2 percent rule states that your property will more than likely be a success if the rent you take in each month is at least 2 percent of the purchase price. The market today is more of a seller’s market, meaning housing costs can be high, but as rents are rising exponentially, theoretically it should still be easy to abide by this simple rule.

Know your Budget

When we fall in love with a place, it can be easy to forget that we have a budget, or we tend to underestimate the costs involved, trying to force the property to fit in our budget, but unless you are buying a turnkey home (and if you were, it more than likely wouldn’t abide by the 2 percent rule) you can expect there will be hidden surprises destined to take a big bite out of your budget. Everything costs more these days, so whatever number you have calculated for paint, flooring, repairs, and maintenance, should probably be ratcheted up at least 15 percent.

Determine How you Want your Property to Work For You

All properties are not the same and when you purchase your first, the next thought should be about making it work for you. Choosing its purpose can change its place in your life, adding more or less to the costs for upkeep. Renting out homes for corporate rentals will have less turnover, lower rental rates, and far less work in between guests. You can go one step further and look into the long term rental market and save money by not having to furnish or decorate, as well as not having to invest as much in cleaning. Maintenance will always be a part of the equation, but if you follow the first rule of rental purchasing, there shouldn’t be a problem.

Location, Location, Location

Location really does matter and once you have determined your property’s purpose, it is imperative that you choose the right location. Families won’t want to be stuck in the middle of 55 and over neighborhoods, Disneyland attendees aren’t willing to stay more than 30 minutes away from the park, and no one wants to stay in a neighborhood that may make you feel as if you need  a bodyguard whenever you leave the house!

Know Your Limitations

There is a lot of work involved with owning real estate properties, beginning with the initial clean-up and repairs. Your purchase deal was more than likely a fixer upper, and if you aren’t much with tools and fixing up, you will need to hire someone to make it work. We tend to overstate our abilities when it comes to handyman stuff, and if you try to do it yourself without having any talents you could end up with a very large and very unimpressive money pit, instead of a property that is actively working to give you the good life you deserve.

Utilize a Property Management Company

No matter how handy you are, how willing you are to roll up your sleeves and put in a little elbow grease, choosing the right property as your investment comes with a long list of must dos. From the initial preparations, to advertising, to answering those middle of the night phone calls when a storm blows a branch through the living room window, investment properties can be a full time job and if you aren’t willing to give up all that time, property management companies can step up to the plate and handle all the tiny little details. iHost Property Management has a passion for this business, a passion we love to share with other likeminded people and choosing us as your partner in this new venture is going to be your recipe for success. Give us a call today!