Real estate investing makes sense for a lot of different reasons, especially in the Pleasant Hill market, where demand is high and supply is low. Well-maintained rental homes are always sought after by great tenants, and if you make good investment choices, you’ll find yourself having a profitable and pleasant investment experience.
However, real estate investing is not without its selection of challenges and pitfalls. Even experienced investors find it’s easy to make a mistake.
Today, we’re taking a look at some of the most common pitfalls we see investors make. We’re also sharing some advice on how to avoid those pitfalls and set yourself up for success.
Make an Investment Plan
Do you have an investment plan that reflects why you’re investing and what your long and short term goals are? If not, you could easily find yourself buying up properties that aren’t right for you. We see this a lot; investors will neglect to do their due diligence, and they’ll dive right in – grasping at any property that seems like it’s at their price point. Don’t do this. You’ll end up spending too much on a property that can’t be successfully rented out.
Establish your investment goals before you even begin looking at properties. It will provide a roadmap and keep you from buying the wrong real estate.
Get to Know the Pleasant Hill Real Estate and Rental Markets
Here’s a pitfall: lots of investors will spend plenty of time educating themselves on the sales market in Pleasant Hill, but neglect to learn anything about the rental market. This is a huge mistake, and it’s one that’s easy to make. Of course you’ll want to know what properties are buying and selling for; that’s what you’re doing right now. However, after you close the deal and have a new investment, you’ll need to rent it out. If you haven’t done your research on the local rental market, you may be surprised at what you’ll earn and spend. You may not understand your tenant pool or the required renovations your property will need before you rent it out.
Avoid this pitfall by taking a look at rental values and vacancy rates. Research the tenant pool and the local economy. You need to know how much supply is available to meet the demand. Talk to a local Pleasant Hill property manager so you can access reliable data and expert information.
Legal Pitfalls are the Worst Pitfalls
The laws have changed dramatically in California when it comes to renting out property. There is now statewide rent control and a just cause eviction mandate. Section 8 tenants must have their housing vouchers considered as income, and you can’t always use an applicant’s criminal background in the screening process.
There are security deposit regulations, accommodations for service and support animals, and habitability laws that are strict and constantly being updated.
Investors need to know these laws, especially those who plan to rent out their homes without the help of a professional Pleasant Hill property manager
Avoid Trying to DIY the Investment Process
Don’t try to do everything yourself. Smart investors know to surround themselves with experts.
There is a lot involved in negotiating a good deal, and you’ll need an expert real estate agent. You’ll need a talented broker or lender to help you get the best financing deal. Talk to insurance agents and attorneys. Work with a Pleasant Hill property manager so you can be well-prepared to lease, manage, and maintain the property you invest in.
Wasting time, money, and resources is a huge pitfall that’s easily avoided.
We can help you through every step of the investment experience, and ensure you avoid these problems. When you’re ready to talk about successful investing, contact us at Stokley Properties.