America has experienced a solid growth in housing prices over the last five years, and it is safe to say the demand for housing is continuing to rise, thus driving housing prices higher and higher.
For many people, these price increases are making it so that purchasing a home is no longer an option, and they are turning to renting instead.
But if you’re looking, and able, to invest in rental property, then you are in the sweet spot for purchasing more homes to add to your portfolio.
Since the housing bubble is still on the rise (and hasn’t topped out at exorbitant prices yet), and the number of people renting is still increasing, those looking to invest in rental property in the Baltimore area can still afford to make sound purchases, and continue to make a profit from their rentals.
However, what property investors cannot afford is to make mistakes during this delicate time.
That’s why today, we are going to explore some of the top secrets to becoming a profitable investment property owner.
Top Ways to Guarantee You Are a Profitable Baltimore County Property Owner
1. Calculate the Numbers
In order to turn a profit on your Baltimore County rental property, it is crucial you crunch the numbers, not once, but twice, to ensure you are making a sound financial decision.
Gather information about your property, properties surrounding yours, and the overall housing market in your area. Analyze what the housing market is doing right now, how much similar properties are going for, and what you can expect to garner in monthly rent amounts.
Then, take a look at the state of your financials. Include things such as an emergency fund, maintenance and repair fund, and miscellaneous expenses such as insurance, upgrades, and the enlistment of Baltimore County property management, and see if the entire equation comes in at, or below your budget.
Only then, after all the numbers come out in your favor (with a little wiggle room accounted for), should you even consider making an investment in a particular property.
Sound like a lot of work?
Being a property owner is no small feat. And, if you want to be a profitable rental property owner, it is going to take serious dedication.
2. Understand the Unethical Real Estate Agent
There is no denying that there are shady people in all industries throughout the world.
And, real estate is no different.
With real estate being such a lucrative business for all parties involved, especially in the current market, there are unethical practices going under the radar everywhere.
As a rental property investor, it’s important you understand the types of unethical practices sneaky real estate agents can pull on people that are unaware that real estate scandals even exist.
And, just because you have a few properties in Baltimore does not mean you are an expert at investing. After all, the only way to grow your business is to continue to learn.
Take it from some of the best property management companies in Baltimore – real estate agents have been known to do the following:
- Convince buyers that a property will sell for a specific price point, only to find out the seller had no intention of selling it for that low
- Have buyers spend upwards of a thousand dollars on needless inspections, knowing full well the seller was never going to sell
- Dummy bid at auctions that they convinced a buyer to attend, forcing the buyer to walk away with nothing, or be pressured into paying above their price limit for a property they really want
- Sell a property to an investor, knowing that another buyer also paid for the same property, but at a higher price
- Encourage investors to over-pay, because the end profit will far surpass the extra cash being spent on the property’s sale price
Some of these tactics simply cause a lot of unnecessary stress on investors looking to add to their portfolios, while others are more serious. And, while some of these practices may not directly affect a real estate agent, the lack of empathy and concern for their client is unethical in itself.
Additionally, some of these unethical practices do financially benefit real estate agents, and harm the buyer, which causes a general distrust of agents across the board.
Make yourself aware of the types of scams real estate agents are capable of conducting, so that you do not fall victim to one, and end up losing a lot of your time and money.
3. Hire a Baltimore Property Management Company
Although the first two tips focus on the actual acquisition of your investment property, profitability will play well into the leasing of your property.
After all, you wouldn’t want to purchase a great property and ruin it by self-managing it, and making rookie mistakes that tank your positive cash flow, would you?
This is why enlisting the help of a property management company, such as Bay Management Group, can be incredibly beneficial to your success as an investment property owner.
With the right property manager in Baltimore, you can reap the following benefits to help boost your profits:
- Aggressive advertising of your newly acquired property through multiple platforms that will garner the attention of a high-quality tenant pool is the key to quick tenant placement. This reduces your vacancy times and, thus, the time you have to pay for the property’s mortgage. The quicker a tenant is paying rent, the less money you spend paying for your property.
- Tenant Screening. Placing the right tenants in your Baltimore County property is the key to getting paid high rent rates, on time, every time. It also reduces the chances of property damage, breaches of the lease agreement, and, ultimately, evictions.
- On-Call Maintenance. Having a property management company that supplies their own on-call maintenance crew to handle repairs and maintenance requests not only satisfies tenants (which can help with lease renewals), it also saves you money. Strong relationships with highly qualified, timely, and affordable contractors makes fixing your rental property less expensive.
- Routine Inspections. Consistently checking on your investment property will reveal when a tenant is not fulfilling their lease obligation to care for your property, according to the lease agreement. In addition, it reveals minor problems, which if fixed early on, can save you a great deal of money and stress.
Having an experienced property management team on hand to help you manage your property, after all the hard work you put in to make a good investment, can further your chances of becoming a profitable investment property owner.
If you own investment property in the Baltimore County area, and are looking to increase your profitability, contact Bay Management Group today. With the lowest monthly management fees in the region, and the ability to provide all of the above, plus more, when it comes to managing your rental, you will surely garner a positive cash flow on any rental property you own with our help.