Rental properties have the potential to be lucrative real estate investments. With proper care and attention, they can be dependable sources of passive income and points of pride in your investment portfolio. Review this guide to discover some crucial guidelines when investing in rental properties. 

How to Make the Most of Rental Properties

1. Explore Different Kinds of Properties

There are several different types of rental properties, and you should look into each one to see which option makes the most sense for a real estate investment and the amount of money you're working with. In addition to the ever-popular multifamily buildings like apartment and condo complexes, there are single-family homes, vacation rental properties, student housing close to colleges and universities, and townhomes or rowhouses. 

You may want to start small, with a single-family house or a fourplex building, and expand your portfolio as time goes on. However, looking at all your options first will help you find an affordable property and plan for the future expansion of your real estate investments.

2. Look for Tax Benefits

As you map out your budget, include the many tax benefits that come with being a landlord. You can deduct various expenses from your annual taxes, including mortgage interest, property insurance costs, and depreciation. You can also sell a rental property and transfer the proceeds into a like-kind property without paying capital gains taxes.

3. Perform Your Responsibilities as a Landlord

Remember that you're going to be the owner of a rental property.  The next step is to hire a property manager or be one yourself!  The property manager needs to stay in contact with tenants, manage their issues and concerns, collect payments, and maintain a safe, secure, and comfortable building. 

All landlords should know the basics of property management, even if you ultimately decide to hire a third-party management company to handle these tasks for you. The more you know about the building and its tenants, the better service you can provide.

4. Crunch the Numbers

Before signing on the dotted line for any real estate investment property, run the numbers by someone experienced in the field of investing, such as a Real Estate Investment Advisor at WEALTH AGENTS. You want to calculate all aspects of ownership, including the purchase price, down payment, taxes, insurance, and loan interest. 

Maintenance and repair costs should be figured in as well; on average, these costs run about 1% of the property's purchase price every year. Knowing the financials will ensure you can afford the property, both now and in the long run.

When you need help finding the perfect rental property investment, contact WEALTH AGENTS. Serving the St. Louis, MO, metro area, their real estate investment services include listings, resources, and coaching to help you build value and develop your portfolio. Call (314) 400-8219 or visit them online to schedule an appointment.