Are you ready to be a landlord?

The idea of owning investment property seems appealing.  If you’re looking to diversify your investment portfolio, then investing in real estate is a sound investment.  As Marshall Field once quoted, “Buying real estate is not only the best way, the quickest way, the safest way, but the only way to become wealthy.”  Field was an American entrepreneur who had once founded Marshall and Field department stores.  Those were later acquired by Macy’s.

He knew then like investors know now, that real estate is tangible and always in need.  People need places for residential and commercial use.  The future projections from Texas A&M Real Estate Center stated in December that future rentals are here to stay.   The center stated in its article, “Oh Give Me a Single-Family Home”, the “In 2011, 53 percent of Texas households could afford a median-priced home. The 30-year, fixed-rate mortgage rate that year averaged 4.68 percent, according to the Federal Housing Finance Agency (FHFA). By 2017, only 44 percent could afford a median-priced home. Meanwhile, the average mortgage rate had declined even further to 4.13 percent.”

The trend will only continue to point people towards rental properties.

If you’re ready to invest in real estate, then consider your financial options which include:

Paying cash

Financing

Using investment accounts

You also have to be prepared to handle tenant complaints and repairs.  Are you going to be the property manager or hire someone to do it for you?  If there is a late night or weekend emergency, have a plan in place to handle those issues since tenants have rights.  For the State of Texas see https://www.texasattorneygeneral.gov/consumer-protection/home-real-estate-and-travel/renters-rights and understand what your obligations are as a landlord.

Is there a high HOA for the neighborhood?  Is the property tax rate high?  What kind of schools is the neighborhood you’re looking at zoned for?  Look at schooldigger.com and check the ratings and statistics for how well those schools perform.

If you need assistance with compiling this information, contact me and I can produce a list of homes and help further answer your questions.

Owning real estate is a sound investment, but remember to ask yourself if being the landlord for that property is what you’re prepared for!