If you want to continue to diversify your investments then
now is the time to buy investment property in Michigan. You can take advantage of the current market
and generate even more income as well as tax benefits.
The trick to expanding your investment properties and
portfolio is in buying. If you're not
careful about picking properties, no property manager in Michigan can save you
and you'll being sinking money into marketing and general contractors trying to
fix the asset that turned into a liability.
Our experience as property managers in Michigan working with
a variety of landlords and property funds has given us a great insight into
purchasing and managing properties.
1. Buying investment property at the right price
Working and negotiation on a bargain now will bring you the
best price later. A lot of real estate
investors - especially new ones - get caught up in the amenities and attractive
features of a home, or the location, with the idea that they can rent it for a
great price and it will attract all kinds of buyers.
Unfortunately, if you overspend on even a nice home it will
be extremely difficult to recoup your costs.
What's worse is that if you overpay and don't try to negotiation a
better deal, your monthly costs will go up which could leave less income for
important services like a property manager or accountant.
Before buying a home, take your personal feelings and
emotion out of it. Know the rental rates
in the area, and factor that into what your monthly costs would be after paying
back a Michigan mortgage lender or providing interest to a private lender. You also need to consider others costs
including insurance, tax, utilities, etc.
2. Find the right neighborhood for investment property
For other homeowners, rental properties aren't always
favored, as rentals don't always make good neighbors. You want to find a community where your
rental property is far more likely to be accepted by the locals. This doesn't necessarily mean you have to
find a "rental community", but it pays to know the general
disposition of the locals.
If new renters are made to feel unwelcome, they're far less
likely to stick around and renew their lease.
Remember that the most expensive side of town does not equate to the
most comfortable neighborhoods, and rentals in bad areas can do just as
It takes real research and time to find the right
neighborhood for an investment property.
3. Know the local regulations on rentals
You need to understand the local regulations on rentals
because rental properties are treated more like a business than a residence. Permitted dimensions and layouts might be
fine for a residential but they may not be accurate or allowed for
rentals. For example: a listing of a home for sale from a Wayne
County real estate agent might say 4 bedrooms, but if that same home were a
rental it might only be a 2 bedroom based on permitted occupancy per square
4. Consider the maintenance and keep it simple
You may love the idea of investing in an old Victorian you've
had your eye on, but even working with a Michigan property manager can make the
maintenance a pain. More elegant and
dated construction requires unique maintenance.
A slate roof, steep roofing or special leaded glass can look
attractive but it will be extremely costly to maintain or improve. Standard materials from Lowe's just won't
apply, and contractors that have to make special accommodations to work on your
property could charge you more.
When you're looking to buy an investment property, keep
maintenance as well as renovation and rehab, location and the people around you
in mind. These all affect the profit you
can make from your investment property.
Also consider ease of access, HVAC, plumbing and electrical, as regular
extra work can wind up costing you a higher monthly rate with a property