Real estate investing can be profitable, especially in a market like Orlando, but it can also be a huge challenge and even a disappointment if you’re making some of the common mistakes we see a lot of investors make.
Investing mistakes are often costly – that’s the worst part. You decide to buy rental property because you want to earn consistent monthly rental income and long term ROI.
As professional property managers who work with a lot of investors, we see some of the most common mistakes that are made. Here are three steps to avoid them.
1. Educate Yourself on Investing and the Orlando Market
Take the time to understand the basics of investing and the local market that you want to join. You need to know how to determine fair market value and you need to estimate accurate rental projections. You need to know the cost of ownership and where you should buy.
In central Florida, for example, prices and properties can vary dramatically depending on where you’re looking. Loft spaces in downtown Orlando are going to rent differently than suburban single-family homes in new construction Altamonte Springs neighborhoods.
It’s a mistake to think you can get rich quickly with real estate. This is a long term investment strategy, and it’s important to be prepared. This is not the stock market and you cannot get in and get out of real estate investing on a whim. It takes time. Real estate investments are not liquid.
2. Create an Investment Plan
Understand what you want and why you’re investing in real estate. Map out the answers to pertinent questions such as:
- How many properties do you plan to buy?
- Will those properties be single-family homes, multi-family units, or a mix?
- How long do you plan to hold these investments?
- How will you pay for maintenance, vacancy, and renovations?
A written investment plan will help you make good decisions and protect you from bad decisions.
3. Put Together a Professional Network
It’s not impossible to succeed without great mentors and partners, but it isn’t easy.
Surround yourself with a strong team. If you want to have a partner, maybe get a partner who complements your weaknesses. Have a good CPA or financial planner. Always have a good broker or agent as well. Who you surround yourself with matters a great deal. Do not invest in a bubble all on your own.
Your property management partner is especially important. Don’t wait until you’ve already invested in a property to consult with a management company. We will lease, manage, and maintain your property, but we can also add a lot of value when you’re looking for the right investment. A good property management partner can help you understand how much rent you’re likely to collect and what kind of repairs will be needed to get the property ready for the market.
Take these three important steps when you’re preparing to invest, and you’ll find you have a much better experience. You’ll be more prepared, less stressed, and more profitable.
If you’d like some help, we’re here. Contact us at Park Avenue Property Management. We work in Lake Buena Vista, Orlando, Kissimmee, Celebration, Maitland, Altamonte Springs, West Palm Beach, Tampa Bay, and throughout central Florida.