You’ve probably heard a lot of experienced real estate investors tell you how incredible it is to be involved in the market and making money.
They don’t often tell you how stressful the process really is, especially in the beginning.
Buying your first investment property produces anxiety, even if you’re pretty chill. Even if you’ve read all the books and listened to all the podcasts and followed all the expert advice.
In this blog, we’re talking to new and potential investors who are preparing to buy their first Colorado Springs rental property. We know there are a lot of details to manage, and it’s easy to get overwhelmed.
Here’s how you can help yourself and prepare for a successful investment experience.
Gather Information on the Colorado Springs Rental Market
Rental markets generally follow trends that are similar to the sales market. Sometimes, rental homes are in high demand, and other times the market is flooded with them, and it’s harder to rent out your investment property. Sometimes, trends are predictable and other times we’re surprised. The pandemic, for example, introduced eviction moratoriums but also ultimately drove up rental values.
Thanks to a thriving job market and a strong local economy in Colorado Springs, the real estate rental market here has been pretty stable. There’s a lot of demand from good tenants for well-maintained homes.
Get to know the trends in the market. Study neighborhoods and shifting demographics. Figure out what you’ll need to spend to get the property that fits your investment goals. Knowing how the market works will help you decide what to buy and when.
Resources You’ll Need: Time, Money, and Patience
Investing in Colorado Springs real estate takes time. And, renting out a home will not allow you to get rich quick. It can be stressful not to make any money right away, but that’s what you should prepare to encounter. Your wealth will accumulate by buying and holding rental homes. The longer you hold investment property, the more profitable it will be. That’s due to the long-term effect of property appreciation.
Budget for Maintenance, Vacancy, and Other Costs
Costs are almost always higher than you anticipate. As a new investor, you’re probably budgeting for routine maintenance – but don’t forget the emergency repairs and the preventative services and inspections that can help you avoid those emergencies. Plan to have your HVAC inspected annually, for example. Have your roof checked before the winter.
You’ll have less stress if you understand that there will be vacancy costs, unexpected repair costs, and expenses associated with marketing your home, preparing it for the rental market, and finding good tenants.
Work with Colorado Springs Property Management Professionals
A great way to reduce stress during the process of investing is to work with Colorado Springs property managers. While your real estate agent and mortgage broker can help you manage the financing and negotiation associated with your investment, a property manager can help you understand how much rent you’re likely to earn and how long it will take to rent your property to good tenants.
Property managers understand the rental market and its demands. You’ll have some idea of what kind of repairs and upgrades might be necessary to get the home rented. You’ll know what vacancy rates tend to average and whether you can expect high tenant turnover. Don’t buy an investment property without talking to a property manager. We know the laws, the requirements, and the best practices that will make this a less stressful experience for you.
We’d love to help you work through some of the most difficult parts of buying a Colorado Springs investment property. Contact us at Muldoon Associates.