Real estate is considered one of the top picks for new investors, but it comes with its own set of risks. An investment property requires a lot of upkeep on your part, so you can't just let it sit. The value may also fluctuate depending on how well the overall housing market performs.
If you want to avoid these issues, then you'll need to put in plenty of effort to keep your property in good condition while also generating profit. That means renting out your space to good tenants and insuring yourself against disaster.
Here are three ways to protect your new LA investment property.
1. Rent Out Your Apartments and Rooms
First of all, you should consider renting out any empty apartments or rooms to tenants. This allows you to accomplish two goals.
First, renting out a unit allows you to generate passive income from the tenants. Second, you can rely on these tenants to keep the inside of your property in relatively good condition rather than letting it collect dust.
If you own a vacation rental, include additional amenities such as personalized gifts and a custom-stocked fridge. To make a normal apartment more appealing, you can pre-furnish them for new tenants.
2. Find Reliable Tenants
Ideally, you'll find reliable tenants who are willing to stay on your property for long periods and don't cause any problems. That way, you won't have to deal with either evictions or finding new tenants.
If you want to avoid resident turnover, try to get to know them and keep an open line of communication. Rental pricing shouldn't skyrocket each year.
You should also create a welcoming environment for them. They may want to make minor property upgrades, like adding shelves or painting a room. You may want to approve these as long as they agree to reverse any changes before they move out.
3. Get Insurance
When you're renting out an apartment or a commercial building, you'll need some kind of insurance to protect your investment. You'll want to buy landlord insurance for your rental property, and any renters should buy renter's insurance.
Landlord insurance protects property owners in case of accidents or lawsuits. It fills in for situations where homeowners insurance doesn't apply.
Renters insurance covers a tenant's personal belongings and living situation from incidents ranging from burglary to natural disasters. As such, it's highly recommended that you require any renters to purchase renters insurance before moving in.
Get a Bigger Return on Your Investment Property
Your investment property is meant to make your money, not lose it. As such, it's important to rent it out to the right people and get insurance to protect you from potential loss. At the very least, you want to break even so it isn't costing you extra money.
PMI Los Angeles offers property management services to the Los Angeles community that you can trust. We utilize state-of-the-art technology to help property owners succeed with their investments. Reach out to set up a consultation and learn more about how we can help.