What are 4 rental property mistakes you should always avoid?
A rental property is a great investment. But if you’re not careful, you’re liable to accidentally turn your cash-flowing blessing into a money-pit curse.
Here are 4 rental property mistakes you should always avoid that we’ve collected for you. So many landlord beginners find themselves financially devastated because they don’t learn these rules.
Don’t worry if they sound too simple. It’s sometimes the “obvious” mistakes that cost investors the most money.
#1 Don’t Be “Passive” About Your Properties
There’s absolutely nothing wrong with being aggressive. In fact, the more rental properties you buy, the more money you’ll end up making.
This is one of those rental property mistakes you should always avoid.
Don’t fall into the trap of avoiding buying good-deal properties because you worry it might be too much work. Minor logistics like this can be solved later. There will always be investors who are willing to develop partnerships.
Put yourself out there. Start working phones and developing relationships with as many realtors as possible.
Know what’s on the market and have a strategic approach to looking for deals. More is better.
#2 Don’t Sell Unless You Absolutely Have To
Hard up for money? Get a mortgage on your property.
Have too many properties? Hire more people to help you deal with them.
The need to actually sell a property you own is quite rare. That’s because there are so many ways to use your property as leverage to get more money.
Unless prices are absolutely soaring, keep it.
MarketBeat has a great article on this if you’re interested in how to avoid being passive. It’s a very dangerous game if you ignore it.
Never give an inch if you can find alternative options that allow you to keep the properties you own. This is another rental property mistake that you can’t allow yourself to keep making. It will cost you a lot in the end.
#3 Raise Money, Get Investments
If you have a true system that works, make it worth your time. Don’t go small, go big.
Look for private investors and partners. People are always willing to help finance a property because it is one of the most stable speculative investments on earth.
Heck, even most banks are going to work with you if you show them that you’re system works.
Unless you plan to dump a whole lot more of your money back into purchasing more real estate to continue scaling a small project, it’s probably worth talking to someone who can help you take control of more properties.
#4 Know Your Budget And Plan Accordingly
A big mistake many investors make is spending too much money on repairs that won’t improve the value of a home.
When you spend too much money on repairs, whatever they might be, you have to rent the property at a price that reflects those changes. Otherwise, you will lose money.
If you’re having trouble knowing how much to charge for your property, you can always read one of our guides on how much you should charge for rent.
How To Get Started Planning
Before you start a project, you need cold, hard numbers.
That’s why we built a very powerful calculator tool that can help you plan a winning strategy for your property.
Here at Rental Property Calculator, we built a powerful tool that even we use on a regular basis for our own properties because it’s such a powerful tool
Feel free to try it out!