Real estate is an asset that is likely to appreciate over time. If you’ve recently purchased your first Connecticut investment property, congratulations. You stand to earn quite a bit of money over the long term.
Renting out the property comes with a few challenges, headaches, and liabilities. Today, we want to share four tips we have for first-time investors so you don’t make the expensive mistakes that many other property owners have made before you.
1. Price Your Connecticut Rental Property Correctly
New investors are often confused about how to price their rental property. You probably have an idea about what you’d like your property to earn every month, but the rental price is really market-driven. It doesn’t matter how much cash flow you’re after or what you’ll need to make your mortgage and tax payments. Evaluate the market thoroughly and check the prices for competing properties that are similar to yours.
Smart investors do this before they even buy the property. Hopefully, you’re already aware of what your property will likely earn. Remember that vacancy is more expensive than anything else in real estate. So, don’t overprice your property.
2. Make Rental Property Maintenance a Priority
Make sure that routine and emergency maintenance issues are a priority for you. Any deferred maintenance will only damage your home and drag down its value. It will also create frustrated tenants who feel like their landlord isn’t taking care of their responsibilities. When a tenant makes a maintenance request, respond to it right away, or at least let the tenants know when you’ll be able to take care of the problem.
Handling problems while they’re small will save you money and avoid headaches. In our years of experience, we have never heard of a maintenance issue becoming easier or cheaper with time.
3. Understand the Connecticut Rental Laws
In Connecticut, there are new rental laws in place that affect how and when you raise rent and what you have to do when you’re evicting a tenant. You also have to pay attention to new standards when it comes to income verification during the screening process. Habitability laws matter, and so do state and federal laws like fair housing laws and the Americans with Disabilities Act.
4. Choose a Connecticut Property Manager
Unless you have the time, knowledge, and experience to manage an income-producing property on your own, hire a professional property manager. You need someone who knows the local market and understands the property management industry. Find a company that can accurately price the home, market it, and screen for highly qualified tenants. Look for a management company that has good relationships with local vendors and has a reputation for helping owners earn more and spend less on their investment. A local management company will also understand all the laws, requirements, and best practices in Connecticut property management. You need local expertise when it comes to leasing agreements, code compliance, and reporting.
We’d be happy to help you get started as a real estate investor in Connecticut. Contact our experienced team at Idoni Management.