Investing in Phoenix offers some great opportunities to build wealth and experience a stable and successful real estate market. However, new investors sometimes struggle with buying the right property and renting it out effectively. Zen Rent manages single-family homes, condos and townhouses in and around the Phoenix area, including in Mesa, Scottsdale, Chandler, and Gilbert. We work with beginners all the time, and we have some tips for how to have a great early experience.
Choose Your Investments Wisely
Many beginners think they make money when they sell a property. Actually, you make your money when you acquire a property, and that’s why you have to get it right. To maximize what you earn, you need to buy the right home at the right time for the right price. This is the best way to ensure a consistent cash flow and increase your long-term ROI. Set some investment goals so you know what you’re looking for.
Prepare Your Property for the Phoenix Rental Market
Once you have closed on your home and you’re officially an investor in Phoenix real estate, you’ll want to work quickly to get that property ready for the market and rented out to well-qualified tenants. Vacancy costs are expensive, and the money you’re losing on an empty property is money you’ll never be able to earn back. So, if your property needs work, make sure that work is done right away. Have it cleaned, take care of minor cosmetic updates and upgrades, and make sure it’s ready to attract the best possible tenants.
Price Your Phoenix 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.
Make 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. No maintenance issue ever became easier or cheaper with time.
Don’t Forget Your Tax Benefits
Real estate investments hold many advantages over other types of investments, particularly when it comes to taxes. Your rental property can help you reduce your tax liability and provide you with a number of ways to defer and reduce what you owe. Make sure you talk to your tax advisor or CPA, even before you buy an investment property. You’ll want to know how to structure your acquisitions and pay your taxes so you ensure you’re getting as much of a benefit as possible. Remember that you’ll be able to depreciate your property, and any professional services you pay for (such as property management) are tax-deductible. You can also write off much of your maintenance work.
Work with Professional Phoenix Property Managers
Smart investors know that professional property management is the best way to earn more and spend less on a rental property. As residential managers, we have the resources and the experience to take care of everything from lease enforcement to property inspections. We understand the local, state, and federal rental and fair housing laws. Unless you’ve been in the property management field yourself, the learning curve can be difficult when you decide to manage your own property. And, your mistakes can be expensive.
With these tips, we think even beginners have an excellent chance at making some money in the Phoenix rental market. If you have additional questions or you’d like help with your own property, please contact us at Zen Rent.