Archive for the ‘Real Estate Investing’ Category

Apartments come in different sizes, with different amenities and substantially different income and commitment levels.

Deciding what level of commitment you want to have with your property should be a primary consideration before leaping into an investment.

Following are three things to think about when deciding what kind of commitment you are going to make with your residential investment property:

Size of the Investment

Starting with smaller investments such as duplexes will ease you into being a landlord.

The smaller scale means less time will be committed to dealing with tenant issues and building maintenance. There is a direct relationship between the size of the property and the size of your financial and personal commitment.

Management of the Property

The bigger the property, the larger the issues. A duplex may require a few hours a month to keep up the grounds and deal with tenant problems. A 12-plex, on the other hand, has 10 more units, larger heating and cooling systems and bigger electrical infrastructure, and it is just a bigger physical structure. Bigger buildings have potential for larger problems. This can be particularly daunting for new investors, and property management may be the only option if your investment criterion does not meet your personal experience and expertise.

Property managers can offer the best of both worlds for some residential investors. Arrangements can be made to market and fill vacancies, deal with delinquent tenants and address building maintenance needs.

Varying costs are associated with property management companies. They come in a variety of sizes and types and can encompass grounds maintenance, building upgrades, tenant issues, marketing programs and tenancy retention programs.

The more inclusive the agreement, the more it will cost. However, the higher cost means less commitment from you and may enable you to have a larger investment level than you would if you were going to manage the property yourself.


Work within your budget. A lot of first-time residential investors overcommit themselves financially and don’t leave a reserve fund. This leads to stressed landlords and frustrated tenants as building issues mount and fail to be repaired in a timely fashion.

A reserve fund is essential if you’re investing in residential real estate. This reserve fund should be established to deal with the unexpected. With any business, you need to have a plan to deal with the unexpected. You don’t want to be that person looking blankly and saying, “I never saw this coming.”

Whether you are a new or seasoned residential investor, deciding how much time, energy and capital you wish to invest is critical to the long-term success of your investment.

Decisions need to be made about the size of the property, the investment budget and reserve fund, and whether you are going to use a property management company. If you have honestly answered these questions, then you can buy an investment property that will provide you with years of very positive returns.


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