Buying your first investment property in Lancaster, CA can be very exciting. Real estate is often a profitable investment option.
However, seeing as it is a big investment, it’s wise to be cautious.
One wrong move could cost you.
So, before making any big decisions, make sure you do your research on Lancaster’s property market.
If you’re just getting started and wondering how to successfully buy a rental property, we want to offer you some helpful advice.
8 Real Estate Investing Tips
Tip 1. Prepare yourself financially.
One of the biggest reasons why real estate investors fail is they lack sufficient financing. So before investing in rental properties, you need to consider all your financing options.
Take mortgages for instance. Different lenders have different rates, terms, and repayment policies. You need to make sure you weigh the final cost of all your financing options.
That means comparing different lenders to see which one offers you the best deal. A good mortgage deal means that you’ll get to keep most of your profits.
Tip 2. Start off your investment career with a simple single-family rental.
Why? Managing a single-family home is easier than dealing with a multi-family apartment.
The fewer tenants you have to deal with, the easier it will be for you to properly manage your investment.
By starting off with a single-family home, you’ll get the opportunity to learn and sharpen your rental management skills. The risks are also a lot less substantial than with multi-family property.
Tip 3. Look for a turnkey property.
With a fixer-upper property, you’ll have to wait a few months for repairs and construction to be complete.
Fixer-uppers are not always an affordable option. There is a lot of responsibility involved in remodeling a rental.
Every passing month counts as lost revenue. And, if you are like most real estate investors, your goal is to make money. So, investing in a turnkey property is always a good move. A turnkey property is rent-ready from the day you purchase it.
Tip 4. Come up with realistic ROI estimates.
Before buying an investment property, calculate your investment return.
Just how much profit are you going to make from the property? How long is it going to take for you to pay off your mortgage loan? You want to find out whether the property is financially promising from the start.
Luckily, Lancaster, CA has a number of great neighborhoods. Some of which offer good ROIs.
You have to have to learn about each neighborhood and how fast they are growing. That way you’ll find one that offers you the highest ROI. Generally, a cap rate of 7% or more is okay.
Tip 5. Learn more about the property’s neighborhood.
Aside from the ROI, you have to make sure the neighborhood provides a decent, safe, and comfortable living environment.
Invest in places where most tenants will want to live. Buy real estate that is close to necessary amenities and good schools and is in a good neighborhood that has a low crime rate and a friendly community.
Regardless of how cheap the rent is or how glamorous the house looks, very few tenants will be okay with living in an unsafe neighborhood.
You must give the location some thought. Ask yourself, would anyone want to live here? And if so, why? What makes that neighborhood so special?
By taking the time to find a great location, it’s guaranteed that you’ll attract long-term renters with ease.
Tip 6. Don’t be afraid to ask for advice.
Learn from other property owners’ mistakes – another great way to kick-start your property investment career. Start networking and linking up with some of the area’s most successful property owners.
Owning and managing a rental property is never that simple. It’s to your advantage to find out all there is to know about owning a rental property. Discover other investor’s failures, successes, and how they manage to keep their rentals profitable.
That way you can prepare for the hurdles you may come across as a new real estate investor in Lancaster, CA.
Tip 7. Consider hiring a property management company.
You may want to consider hiring a professional property management company in Lancaster, CA.
It’s true that rental properties in Lancaster, CA are lucrative investments. However, managing one can be quite demanding and stressful.
To see if you are ready to manage your property, ask yourself these questions.
Do you know the statewide landlord-tenant laws?
Are you well-versed with California Fair Housing Laws?
Do you know the state’s habitability laws?
Will you be comfortable taking late-night calls?
Will you know how to handle an eviction?
If you don’t feel comfortable with the majority of those questions, then it might be in your best interest to hire a property manager. They will handle all the management tasks for you. From collecting rent to evicting bad tenants, they’ll make sure your property is in good condition and profitable at all times.
The best part about hiring a property management company is free time. You won’t have to worry about any 3 a.m. calls when the plumbing starts acting out. Property managers do the hard work for you.
However, you need to make sure you hire the best management company in your neighborhood. Competent managers will help you to maximize your rental income and grow your investment.
Your success in Lancaster, CA real estate investing depends on how much time, effort, and research you put in; before buying the property. So, make sure you are well-informed prior to purchasing any rental property. Good luck!