If you have the means to do so, investing in real estate can be a great choice if you’re looking to make some extra money. It gives you a relatively stable source of passive income in the present and can help you build up your wealth even further if the property value increases in the future.
Once you have that investment property, though, what are you supposed to do with it? If you’re renting it out to individuals or businesses, you certainly can’t just sit back and hope for the best!
There are definitely a few things you should consider doing with your investment property in order to help ensure that it retains its value over time.
Choose Your Tenants Carefully
Whether your investment property is residential or commercial, it is important to implement a comprehensive screening procedure when choosing your future tenants. If you want to be able to keep collecting rent on your property without interruption, then you’ll want to look for tenants in a good financial situation that are hopefully looking for a long-term rental commitment.
While it may be tempting to rush the process so that the property isn’t just sitting there losing money, it will likely be worth it in the long run if you take your time to find the right tenants. You don’t want to have to deal with a lot of tenant turnover as it creates a lot more work for you and could mean even more lost income over time, so interview your applicants thoroughly to see who would be the best fit.
Maintain the Property
One way to keep your carefully vetted tenants happy is to keep up with property maintenance. You should certainly respond to any of your tenants’ requests for help in these matters, but it’s also important to do your own checks on a regular basis to make sure there isn’t anything that requires repairs or replacements.
If you’re too busy or don’t have enough knowledge to adequately perform these checks and repairs yourself, then consider hiring a property manager. While some people only hire a property manager to collect rent, others use one to handle nearly everything pertaining to the property, from screening and filling vacancies to performing maintenance tasks.
Pay Your Taxes
Your tenants aren’t the only ones with financial obligations when it comes to your investment property. While they may be ultimately contributing money to them, you are the one who is responsible for paying any taxes on your property.
Unfortunately, unless you are a financial wizard of some sort, this can be a confusing process. You may be able to make quite a few different deductions due to the fact that it can be treated both as a business and a property, so do what you can to take advantage.
Your best bet would probably be to hire an accountant who specializes in investment property tax law. They will be able to help you navigate your options and maximize any returns.
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