Real estate investment is often considered an excellent way to make money and build generational wealth, which is why people are investing in the Austin rental market. Austin’s rapid growth, strong job market, and low rental vacancy rate make it attractive, driving demand for housing and rising property values. If you want to succeed in this competitive market, you need to avoid these five mistakes landlords in Austin, TX make.
That being said, you can also lose a lot of money, too, if you don’t have a solid investment strategy and do things right. There are a lot of pitfalls that property owners fall into, unfortunately, and it can turn great opportunities into big failures.
Here are five mistakes landlords in Austin, TX, make that you need to avoid.
Overpay for Property
Your entire real estate investment journey begins with the property itself. If you don’t buy the right property — one that is good for the Austin rental market — then you could be in for a long haul of not making money.
Your monthly break-even mark will revolve around how much you paid for the property. If you overpaid, you’ll need more rental income to generate a profit.
If your break-even amount is higher than the Austin rental market rate for your type of property and its location, it’ll be very hard for you to succeed.
Not Planning for Expenses
Your mortgage, taxes and insurance make up the base of your expenses, but they certainly aren’t all you’ll have to pay. There are many ongoing expenses that landlords have to shoulder, such as repairs, maintenance and other general property management aspects.
If you don’t plan for these expenses and have the money to pay for them in a reserve fund, it could lead to failure. It’s best to have these expenses integrated into your monthly budget and have funds available to pay for them so you don’t rack up more debt — with high interest — by charging them on a credit card.
Not Getting the Right Residents
To succeed in real estate, focus on the property, residents, and management.
It’s important not to overlook just how important it is to find the right residents for your property. You should always look for high-quality tenants, as settling for anything less can be disastrous.
The reason is that high-quality residents are more likely to take pride in their home and treat it as if it’s their own. They are less likely to cause extra problems for you and are more likely to pay their rent on time.
Attracting the right residents requires an effective marketing strategy, high-quality properties, and in-depth screening system.
Not Paying Attention to Resident Retention
Many real estate investors make the same mistake that other businesses do. They spend so much time on attracting residents. But not nearly enough time on retaining the ones they already have.
One of the most important aspects of successful real estate investments is having residents renew their lease. There are many reasons why this is the case. Most of them revolve around the fact that finding new residents is expensive.
The turnover process can be costly, and involve things such as new paint, extensive cleaning and repairs, and possibly even updating features. There are also costs associated with listing your property for rent and marketing it to new prospective residents.
Not only that, but every day your property sits vacant is lost revenue — with no relief on the expense side.
Trying to Go It Alone
It may seem like you can save money by doing everything on your own. But this is often much costlier in the long run. As mentioned above, property management is one of the three main cogs to success in real estate investment.
Yes, there is an expense to hiring a property management company. But if you hire the right one, it will provide you with a huge positive return on your investment.
Partner with 1836 Property Management
To be successful with real estate investment, you need to avoid the five mistakes many landlords in Austin, TX make. Perhaps the easiest one to avoid is trying to do everything yourself.
Partner with 1836 Property Management for success! We have the proven experience and tools to help you with strategic marketing, smooth operations, and long-term returns!
For more information, please contact us online today, give us a call at (512) 994-4323, or stop by our office: 1836 Property Management is located at 1704 ½ South Congress Avenue in Austin, TX.
