OK....now you have researched the local real estate market, put a plan of attack together, had an offer accepted, secured financing and finally purchased a property.  How do you make sure your investment becomes profitable?

Here are a few of the major obstacles to avoid when you have finally bought your investment property. 

Finding Good Help…

Whether you have a fixer you are getting ready for resale or a rental you are holding on to long term you are going to need to deal with repairmen and/or contractors. Finding a dependable handyman that can do most repair work without costing you a fortune is crucial, but not easy to find.  Don’t go straight to the yellow pages and call the big ads.  They generally have high overhead and will cost you too much for your repairs. 

A good place to look for affordable in your local newspaper to under the services guide and test a handyman out on a small project before scheduling a large job.

Also ask around between your friends colleagues and family.  Many times someone you know may know someone that does great work, but doesn’t advertise his service. If they work well and get the job done on time and within your budget then you have found yourself a winner!

Make sure they understand that you are most interested in getting a realistic time frame for your projects and that you fully expect the project to be completed within the quoted time frame.

Holding costs are your biggest enemy in the real estate game.  The quicker you can get work done, the lower your overhead and the larger your profits. 

Renting to Tenants…

The biggest mistake a landlord can make is not doing a thorough credit check on the prospective tenant.

Always make sure to do a credit check on any applicant that is interested in your house.  Make sound business decisions on who you rent your house to.  You will hear every sob story in the book on why you should rent to one individual over another.

Waiting for an individual or family that has decent credit and rent history can save you hours of headaches and hundreds or thousands of dollars.  Here are some good tips to follow when renting your property:

Always get a damage deposit.  When tenants move out they will do a much better job of getting the house back to move in condition so they can get their deposit back. 

A damage deposit should be between one half a month and one months’ rent

Take many photos of the property before the tenant moves in that shows the good condition of the property.  Show the tenants that you have these photos in your file and that you expect the house to be returned in like condition.  Just the fact that they know you have the photos may help them take better care of the property.

Go through the complete rental agreement with the tenants before they move in.  Too many times contracts are hurriedly signed on the car hood so you can take the money and get it in the bank.

Schedule a time to go through the contract fully with them even if it takes an hour or so out of your life; most times it will save you countless hours and dollars in later frustrations.

Let your tenants know this is a business you are running and that you expect them to fully follow the agreement. 

Make sure they understand you will be collecting late fees if the rent is late.  Let them know you expect the property to be treated as if they owned it themselves.

Walk through the property with the tenants before they move in.  Have them make note of anything that is in disrepair and write it down. 

It is easy to forget details so the more details you have written down the less confusion there will be when the tenant moves out.

The property is your investment, but investing some time in implementing systems for putting your tenants in the property will give you huge rewards in the future, and make your business run much more efficiently in the coming months and years. 

Follow these tips and you will be starting your business out on the right path.