Investing on Single Family Rental Real Estate? Ali Ata Has Some Reminders

As real estate consultants like Ali Ata have seen, single-family rentals have been one of the classes of real estate that had done well during the pandemic. A good percentage of today’s investors feel that this is worth getting ahead, coming into the following year. So how do you get started on getting into this market before it truly booms?

• Think about it before you do anything drastic — The last thing you want to do is to make decisions based on emotion. For example, if you’ve only handled your personal residences for a while, you need to stop and think about whether or not you’re prepared for the kind of work that a rental property will entail. Ali Ata explains that it’s no simple matter, and you need to consider what it takes. It doesn’t just mean picking up a check for the rent every week. You’ve got a lot of responsibilities as a landlord to look forward to.

• Think present, not future — You might be curious about this one—many real estate specialists keep reminding newbie investors that real estate investment is a long game. But for rentals like this one, you need to consider whether the property will give you a positive cash flow from the day the renters start living in it. You need to think about the “now” because if you keep picturing how rents and home values will increase in the future, you might be setting up for disappointment.

• Be realistic about your budget — Ali Ata reminds investors that they are now both the property owner and its landlord, along with the host of responsibilities that both roles will entail. You’ll need to set aside a budget that maintains the value of your asset, and that means being vigilant about the upkeep of the property. Ideally, you want a piece of property that will keep bringing you income steadily for years with no issues or gaps. But this is hardly the case. Prepare your budget for untoward incidents and situations, including the dreaded vacancy expense.

As long as you stay realistic and think about all the different aspects of what becoming a landlord would be like, you should be able to get through your first years of single-family rental with minimal hassle and issues.