Trade Secrets for Successful Real Estate Investing in Contra Costa County

Successful real estate investors know that preparation and planning are very important in purchasing and managing a rental property. We’re sharing a few tips and trade secrets with you so you know what to expect when you decide to invest in real estate.

Budget for Your Investment Property

Even before you buy a property, it’s critical that you have a budget. You need the knowledge to know what this new business venture will cost you and how you’re going to cover those costs. You’ll need to anticipate your mortgage payment, the property taxes, and the insurance payments that you’ll need to make on a monthly basis when you invest in a new property. Know these things before you do anything else. Then, when you take a look at the rental market and the potential rental rate for your home, you’ll see positive cash flow.

Establishing a Rainy Day Fund

Establishing a budget is just the beginning. After that, you need to have money set aside. Set up a rainy day fund to cover these costs. Because, you aren’t planning for “if” something happens: you’re planning for “when” something happens. The old water heater may burst, a garbage disposal could stop working, or you may need to endure vacancies where you aren’t collecting any rent. You want to be prepared so you aren’t living month to month. Have a reserve set aside to be a successful landlord.

Put a Team in Place

The stories we hear from investors who are facing challenges are usually due to people having the concept that they will never have a problem. It’s not necessarily a problem that you’ll have, just challenges that come with real estate investing. So be prepared, have a plan, and put together a team that can help you. If you’re doing it by yourself, have a landscaper, an electrical contractor, a licensed plumber, and a professional property manager. Hire someone who knows the local rental rates and has a staff of preferred vendors so you can become a successful investor.

If you have any questions about real estate investing, please contact us at Stokley Properties.