Investing in real estate can be very profitable if you do it right. However, you shouldn’t fool yourself into thinking it’s easy because it’s not. For instance, buying properties and renting them out is a great way to earn a passive income, but it also entails a lot of work. Plus, you need to do a lot of research and think strategically to find a profitable investment property. If you don’t know where to start, here’s a list of what to look for when buying an investment property in Maryland.
No. 1 Carefully assess your finances when buying an investment property in Maryland
Buying real estate is a big financial decision. As a result, you should first make sure you can afford it. Start by looking at your finances to determine how much of your savings you can use. Factor in everything, including the down payment, property taxes, insurance, repairs, update, and maintenance costs.
Then consult a mortgage broker to see what types of loans you are eligible for and how much money you could get. Lenders usually have stricter policies and higher interest rates regarding investment properties. The reason for this is that they consider these types of loans riskier.
No. 2 Pick the right location
In real estate, there’s nothing more important than the location. If you pick the wrong location, you can lose money rather than make money. Thus, when buying an investment property in Maryland, you should thoroughly research beforehand. That will enable you to identify the best areas for real estate investors in Maryland.
Regarding Maryland, you should know that Baltimore provides many excellent investment opportunities. One of the main reasons is that more than half of the residents choose to rent rather than buy homes. At the same time, Frederick, Montgomery, and Prince George’s counties also represent good options. Since they are close to Washington, DC, many people commute to work in Washington while enjoying a lower cost of living in Maryland.
No. 3 Clearly define what you want
Once you know how much you can afford to spend and you’ve identified the right location, it’s time to narrow down the search. To do this, you have to clearly define what you want. Start with the size. Are you in the market for a condo, a house, or a mansion? Note that this will also influence the type of tenants you will target. And you should think about this as well because it will help you determine what amenities to look for.
If your target tenant is a young, hard-working, single individual, you should look for properties downtown. These areas provide access to public transport, which makes work commutes shorter, as well as close access to stores and the social scene. Nevertheless, finding a property in a good school district is essential if you want to rent to a family with kids.
No. 4 Can you make it more desirable?
Getting a good return on your investment entails raising your property’s rental price. But even though every landlord dreams of doing this, it’s not always feasible. If the rent is too high, it can be hard to find interested tenants. And having a vacant property is much worse than collecting a lower passive income.
Therefore, you should look for properties with improvement potential. Because the truth is you have to invest money to make a profit. Once you find the right place, think of ways to make it more desirable. Find a move-in ready home instead of a fixer-upper to make things easier. That will enable you to focus strictly on improving the interior design. If you want to hold on to some valuable items for future use, the consultants from Helix Move VA advise you to rent storage.
No. 5 Find a good property manager
Managing an investment property can be a full-time job if you weren’t aware. Apart from marketing your property, finding tenants, and collecting the monthly rent, a landlord should also tend to various repairs, updates, and maintenance. All of this can be very stressful and time-consuming. And if you also have a primary job and family to look after, it’s impossible to do it alone.
So, you should consider hiring a good and trustworthy property manager. Yes, this entails additional costs, but it’s worth it long term. On the one hand, your tenants will be pleased that all their requests or issues are solved promptly. As a result, they’ll likely stay longer and accept the higher rental price. On the other hand, this will enable you to focus on the other essential aspects of your life, such as your family.
No. 6 Look for quality tenants
You should avoid difficult tenants at all costs. These people usually pay their rent late, are negligent, and can cause a lot of damage to your property. As a result, you’ll be losing money instead of making a profit. Unfortunately, it’s hard to identify difficult tenants before they move in. Still, you can do a background check on them. Check their rental, employment, and criminal history, and ask them to provide proof of their income.
Once you find quality tenants, you should do everything possible to make them stay. That entails developing a good relationship with them that is based on trust and mutual respect. Make sure you keep an open line of communication and respond promptly to their request. You can also offer them good advice. For instance, hiring interstate movers is a must if they are moving from Virginia to Maryland. Thus, you can advise them to rely on experts in the industry to transport their belongings safely to your property.
Buying real estate and renting it out represents a great business opportunity. However, this only applies if you invest time and money. Not to mention that you’ll be taking on a lot of responsibilities. Now, if you decide this is what you want, you should start looking for the right property. Keep in mind all the items on this list of what to look for when buying an investment property in Maryland.