Insider experts select the best products and services to help you make smarter decisions with your money (Method is as follows). In some cases, we may receive a commission. our partnerHowever, our opinions are our own. Terms apply to offers listed on this page.
- Marcia Castro Socas has been the landlord for many years.
- She says the landlord-tenant relationship is an often overlooked part of owning a rental property.
- She says buying the cheapest place isn’t always the best, and the news shouldn’t dictate your plans.
One of my biggest financial goals is Real Estate InvestmentI’ve always wanted to own a few properties across the country that I would rent out to tenants as a way to generate passive income. However, we do our best to understand how the whole process works.
not only to find out some cash required for down paymentto cover renovations, insurance, taxes, and fees before a tenant moves in.
To help you understand it, I spoke Marcia Castro Socasa real estate investor, home remodeler, and real estate broker who has generated millions of dollars from her investment properties over the years, here’s what she wants to say to new investors. That’s it.
1. Low prices aren’t always the best deals
In my free time I like to look at properties that are for sale and see which ones I would be interested in buying if I had the cash to do so today. I don’t think my budget is that big, so I’ll also look for the lowest priced property.
Castro Socas says looking for the cheapest home isn’t always right.
When she bought her first investment property, it was Fixer Upper that needed a makeover. she knew it would take time need to pay the mortgage while the house is being cleaned up. But what she didn’t think was all the actual cash she would need to spend on repairs, which turned out to be more than she expected.
“Sometimes it’s better to get a property that doesn’t require as much work, even if it costs a little more,” says Castro Socas. “The lesson I learned here was to honestly assess how much cash you could afford for a project and how much work you were comfortable taking.”
Insider’s Featured Real Estate Investment Platform
2. Don’t let outside news change your real estate plan
As an aspiring real estate investor, I’ve always wondered if there’s a right time to buy, and I’ve been skeptical about renting properties due to the possibility of entering the housing market during a recession. I’m worried that it might get difficult.
Castro Socas recommends not letting outside news change your long-term plans. That’s what she did in 2008 when the real estate market crashed.
She owns a number of rental properties that have lost significant value, and she held her own while other real estate investors sold properties short to get out of debt.
“Instead of hearing the news, we learned that all but one of the properties were making more rental income than the mortgage,” says Castro Socas. “So when the sale market plummeted, it didn’t matter to me because I wasn’t in the market to sell. I was happy.”
Years later, Castro Socas still owns some of these properties and their values are at all-time highs.
“Rather than reacting to market panic, it has proven to be much wiser in the long run to stay calm and look at the actual facts,” says Castro-Socas.
3. Being a landlord isn’t just about money
one of the biggest reasons for wanting to enter real estate You want to earn passive income and grow your overall financial portfolio.
But Casto Socas says owning property is more than just making money. She says it may be easy to focus solely on income and return on investment, but being a landlord is also a landlord-tenant relationship.
“Tenants who have a personal connection with you are more likely to manage their homes better, stay longer, and handle minor repairs themselves,” says Castro-Socas.
In return, Castro Socas ensures that they maintain good relationships by addressing issues promptly and treating residents well. Plus, she says this mindset has led to an increase in income over the years.
“I have several tenants who have been living in rentals for eight years or more, and there are no vacancies in these properties, so my income has been high,” says Castro Socas.