Are you thinking of purchasing an investment property in Columbia, Missouri?
Rental property investments have far-reaching potential. Buying an investment property can help create long-term wealth and a recurring passive income for you.
So, why is specifically investing in Columbia real estate such a good idea? Just to name a few things, the population is increasing, the unemployment rate is low, the renter population is high, the education system is good, and the home values are increasing.
However, as a beginner investor, it pays to follow insider tips on how to make the most out of your investment. Although a rental investment has the potential to boost your financial situation, you’ll certainly need to do proper due diligence prior to making the purchase.
In this article, we’ll go into the basics of buying an investment property in Columbia. Follow these recommendations to maximize the potential of your rental property purchase.
What Is the Columbia Real Estate Market Like?
First and foremost, Columbia is a college town. As such, harnessing the student rental demand can carry a strong potential for significant returns.
Furthermore, the city is conveniently located between Kansas City and St. Louis. This makes Columbia attractive to renters looking for easy access to big cities.
Top Tips for Real Estate Investments in Columbia
1. Know Your Budget
One of the most important things you need to consider when planning to invest in an area is your budget. Columbia has many different kinds of property types, from villas to mansions to small condominiums.
So, plan a budget and know which investment type you’re aiming for. By doing so, you’ll find it easier to shop for your next investment as you won’t have a cluttered view of the market.
Besides having a budget, make sure to consider other things such as taxes and HOA fees as well. That’s because rental property expenses can quickly add up to a pretty significant sum.
2. Choose Areas That Promise High Returns
It’s no secret that a property investment can be a gateway to financial freedom. That’s only if you buy the right property, however.
One key feature of a good rental property is a high rental yield. So, when looking to buy an investment property, go for ones that promise a handsome return.
But how do you find ones that fit this criteria? Weigh the upfront costs against the expected income. An investment property that has the right balance will enable you to reach your investment goals.
3. Hire a Professional Property Management Company
Are you just getting started in the world of rental property investing? If so, consider hiring a professional to help you with the day-to-day running of your rental property.
More often than not, novice investors make the mistake of thinking they can manage their properties on their own. To them, property management is all about collecting rent checks at the end of the month. Now, that couldn’t be further from the truth!
Effective property management requires the right skills and experience. You need to be able to respond to your tenant’s maintenance requests, know how to find a desirable tenant, and abide by all relevant laws.
Choosing a good property management company in Columbia, like Real Property Group, can help manage your property reliably and professionally.
4. Do Your Calculations
Before signing any purchase agreements, make sure you’ve crunched the numbers. Play with multiple scenarios to gauge the potential return of a particular investment property.
For a good overview, consider growth scenarios that are a bit conservative. One key thing you’d certainly want to consider is the potential vacancy rate.
5. Invest In the Right Area
Location remains an important factor to consider when it comes to real estate investing. Once you decide on which area to invest in Columbia, understand the behavior of that market first.
Get to know things such as vacancy rates, potential expenses and expected rental income. Furthermore, gain insights into how the market is expected to behave in the foreseeable future. For example, are there major developments underway or expected to occur?
6. Make Your Property Appealing
First off, congratulations on becoming a landlord. Now, after the closing, the next step is to make sure the property is as appealing to prospective tenants as possible. An attractive property can ensure high rental returns and low tenant turnover, among other things.
Do the walls look like they could make use of some paint? A can of paint only costs about $25, and painting can make a huge transformation to the look and feel of the property.
What about the curb appeal? Does it stand out? In the summer, potential renters may be looking for outdoor amenities such as an outdoor grill while, in the winter, they may be looking for hot tubs and fire pits.
7. Market Your Property Profusely
Now that you’ve boosted your property’s appeal, the next thing is to market it to potential tenants. For best results, you’ll want to make use of both online and traditional channels.
That means combining things like social media and rental listing sites with yard signs and newspaper ads. You’ll also want to craft rental ads that are eye-catching. Make sure to include noticeable headlines and high-quality photos.
8. Rent to the Right Tenants
No two tenants are ever the same. One can be every Columbia landlord’s dream while another one can be a nightmare. The right tenant is one who basically abides by all terms of the lease agreement.
To land a good tenant, you’ll want to subject every applicant to a thorough screening process. A good screening process is one that checks prospective tenants on things like their credit score and income level, as well as rental, criminal and employment backgrounds.
In a Nutshell: Real Estate Investing Tips in Columbia
Columbia is an attractive investment destination for prospective investors. There is a high renter population, the unemployment rate is low, and property values are on an upward trajectory.
Real Property Group provides exceptional real estate services. We can help you make the right investment decision. Contact us today!