Investing in Kelowna real estate comes with many opportunities to build wealth and establish a sound foundation for a growing investment property portfolio. But, it also comes with risks and liabilities.
We see a lot of investors make some common mistakes, and we want to highlight those today so you can avoid them yourself. These pitfalls are often expensive, and can really derail your real estate investing career before it begins.
Forgetting – or not setting – Investment Goals
It’s tough to succeed with your real estate investments if you don’t know why you’re investing and what you’re hoping to accomplish. Before you purchase your first property or continue adding to your portfolio, make sure you appreciate what your investment goals are. As a Kelowna property management company, we work with investors who want to earn as much cash flow as possible. Some of the other investors we work with want to take advantage of property value appreciation. Each investor is unique, and every investor’s needs are different. Make sure you know what you’re doing and why you’re doing it. Otherwise, you won’t make the best decisions.
This is especially important when you’re choosing an investment property. A common pitfall is investing in the wrong home. You’re not buying a home for yourself. Many investors fall in love with a house and then become emotionally attached, even if it won’t make a good investment.
When you’re identifying investment opportunities and looking for a property, choose something that will be attractive to renters. Consider homes that will generate the most income and the best return. For example, perhaps you never considered a multi-family property. But, if you have a duplex or a four-building unit, you’re protected against vacancy costs because you’ll still have income from other units when one tenant moves out. Buy the right property.
Avoiding Costs and Expenses in the Budget
Renting out property provides an avenue for consistent income. That’s the good news. The bad news is that it also comes with costs. Another common pitfall is forgetting to factor those costs into your overall financials. Maybe you’ve not thought of the potential for vacancy and turnover costs. Maybe you’re not budgeting for emergency maintenance as well as routine repairs.
You’ll have to pay property taxes and insurance. Make sure that you do some budgeting that includes all these expenses you’re not anticipating. An eviction, for example, isn’t likely, but you should still have a reserve fund for potential legal issues and tenant claims.
Managing Your Own Property
A huge pitfall that investors rarely see coming is the stress and loss that can come with managing your investment property on your own. Hire a Kelowna property management company. It will lead to a much more profitable – and less stressful – investment experience for you. Take advantage of the professional advice that’s available from brokers, lawyers, insurance agents, and property managers.
Talk to a local property management company about your investment goals before you buy. We can help you manage your property effectively, resulting in lower expenses and higher profits. Unless you have the time, resources, and tools available to manage your own rental property, hire the best managers you can find, and let it all fall into place.
We’d be happy to talk more about the benefits and potential pitfalls that come with Kelowna real estate investment. Contact us today at Vantage West Property Management.