We work hard to provide tips for purchasing Austin, TX rental property. One of the tools we provide is an investor checklist. Realtors and investors looking for Austin properties to buy can use the pointers and the tips that we have put together over the years. It’s a great resource, especially for new investors.
Keep Your Property Management Company Informed
You want to view your property management company the same way you view your support team that includes insurance companies and mortgage companies. These are professionals that you can shop around for, and then you’ll pick one that works best for you and gives you a solid relationship.
Do not wait until you buy the investment home to start looking for your property management company. This should be done way ahead of time, and they should support you during this process. While you are in that search process for your investment home, you want to keep us in the loop about the properties that are on your list. We can do a number of things for you, including:
- Help you identify the best cashflow.
- Help you and your Realtor decide where the best lease markets are and what the best individual property is when you have several options.
- Provide reports before you make an offer.
- Market your home with photos provided by the seller.
Prepare Your Budget
You also need to prepare for accurate budgeting and expense forecast. Real estate is a depreciating asset. It doesn’t just stay there in a vacuum. It depreciates, and you need to be budgeting at least five percent of your gross rent for maintenance over time. A brand-new home might have zero maintenance the first year but over time you can accurately budget five percent of your gross rent.
Different types of investments will have higher maintenance costs, and we can help you identify what those will be.
Tips for Purchasing Austin TX Rental Property: How to Choose an Investment
When you get down to the individual homes and the criteria that you are setting for the properties themselves, you do not need to look at everything. These are some of the things we recommend:
- No pools.
- Average size homes tend to be better (1400-2200 square feet).
- Consider different local tax rates when comparing homes. Two homes that have the same rent amount very well might have two different tax rates which will affect your cashflow.
- Search for properties that meet your investment criteria, not by specific area.
- Plan ahead of time for costs including landscaping, trees, wood fencing, etc.
- Consider diversifying with lower cost properties instead of higher cost properties.
- Home warranties are not great for rentals, and we do not recommend them.
- Wow factors and upgrades are important to renters and most renters are willing to pay for them. You will see renters staying longer.
- You will need a landlord insurance policy which is different from a regular homeowner policy as it is specific for rentals. It should and must include a liability rider with your property management company listed as additional insured.
- Do not forget to register with the HOA and give them your property management information.
- Many investors forget to turn utilities on, so make sure you remember to turn on all utilities, including gas.
- Review start-up costs and be aware that once your home is finally leased it is typically the second month before you see any proceeds.
These are all things we plan for and we budget for when we’re working with investors. If you have any questions or need any help, please don’t hesitate to contact us at Austin Landmark Property Services.