One of my biggest investment interests is real estate. I am currently working with a friend to buy our second rental property. The first property has been a dream situation. It's in another state, and in one of the highest value areas. The best part is the property manager... he has been *totally* excellent. Everything that comes up with the house, he's on top of. Sends the rent checks on time for years now, dealing currently with a less than stellar tenant, makes sure the grass is mowed and yard is manicured, etc. He always earns every penny of his Christmas bonus. But that brings me to my question. I know we lucked out with the current manager. The new purchase will be in an other area... more local and not such outrageously high real estate prices. That means having to find a second property manager. What would your top 2 or 3 considerations be when choosing? What questions would we ask to be sure the manager will take care of it *all* without any hands-on from very busy owners? Or is it a matter of needing to take a risk and seeing how they perform? Maybe there *are* no questions that would give a true picture of what kind of job they'd do?
I think that there are no better investments than in real estate, real estate is something certain that will gain value, considering you are investing in the right area. So that would be my main concern really, to analyze where should I buy not to lose my money.
Good thing you realize that you're very lucky to have the manager you have now, he sounds like an excellent employee. Like you say, it's a risk, you never know how your employee will turn out, you just have to be very through in the interview process, if possible get your current manager to go out there and give the new guy some training
I'd prefer that, Strykstar... but he's wise and shrewd enough to make ME pay for his plane ticket so he could come for training someone in another state. I know the other option is to buy the second property in that same area and use the same manager, but it's one of the most expensive real estate markets in the country. Current thinking (please tell me if you disagree... I realize my calculations may be flawed) is that I'd rather own three houses for the same price of one house in that area. Is that solid reasoning?
I'm not sure I agree with that... Would 3 houses give you 3 times as much profit? I doubt it since it's a more expensive area it should generate a higher income too (even if not 3 times more). But what you are sure is that the 3 houses would generate 3 times as much headache as you would have to be responsible for a lot more people. But if the 3 houses are more profitable then you might want to endure the added responsibilities Do give us some feedback on your thought process, hope I can help out!
I think the best thing that you can do is do your online research and look for a property manager who comes highly recommended. Otherwise, you never know what could happen. Of course the person will SAY that he's going to do the right thing, but that doesn't mean that it's true. Looking at reviews from other property owners who have used the property management company is a better idea in my opinion.
I would have to disagree with Penishia. I don't believe that real estate is always a safe investment. I think you can get more secure investments out there for you money.
Why do you say that wanderingwildman? What can be safe than real estate really? Can you give us some examples? I think that investing in the right areas and recovering real estate is a million dollar deal as we can see from the many real estate tycoons...
That's true Gelsemium, I think real estate is one of the safest investments you can make, while also turning out a good profit usually. Especially nowadays, there are a lot of great opportunities to buy cheap houses or apartment complexes and then just renting them out for more than what you pay for your loan...
I don't know if renting the real estate is really a good deal, it depends on the laws in your country. When renting make short contracts or else you might be stuck with low paying tenants and that is not profitable at all.
