We have talked about how investors in our market can succeed, and it’s just as important for real estate investors to know why they might fail when investing in the San Antonio housing market. When you know what can hurt you, it’s easier to avoid. Generally, we have found that investors in San Antonio fail because of one of these reasons:
They become too emotionally involved with the property or their residents.
They don’t know or understand their numbers very well.
They don’t set or work within the parameters of their investment goals.
They get greedy about what they think they should be earning, and they fail to listen to their professional partners.
Let’s talk about how you can avoid falling into one of these traps when you buy a rental property in San Antonio, New Braunfels, Converse, or the surrounding areas.
Setting Your Investment Goals
As professional San Antonio property managers, we want our investors to succeed. When you succeed, we succeed. Our team of experienced professionals do our best to steer investors away from the things that will lead to failure. Many new investors will have an idea of what they should be doing, but those ideas are often not predicated upon a specific outcome or goal.
Perhaps you have an idea of what type of resident will live in your home, and you’ll unknowingly violate a fair housing law during the screening process. Or, you might decide what you want the property to earn every month, even if the market doesn’t support that number. Maybe your property needs a lot of work but you don’t have the money to fix up the property.
Everything you do should start from a solid and strategic investment goal. That goal needs to have specific numbers attached to it that make sense for what you need and expect to earn.
When you have goals in place, you’ll know whether you’re looking for a property that needs work or a property that’s move-in ready. You’ll have a realistic timeframe for what you need to do and how the scope of work is planned.
Trust your San Antonio Property Management Experts
New investors will sometimes dive head-first into a deal because someone told them it’s a great house or a good price. Those things may be true, but does it make a good rental property? Will you be able to attract residents quickly? Will ongoing maintenance be required? Some investors learn too late that they have to make a lot of repairs to a property before it’s habitable and ready for the rental market.
Making renovations isn’t necessarily bad; but, if it’s not part of your investment goals, you may not have planned on the extra time and expense. A low price tag means nothing if you have to wait three months to rent the property out and spend thousands of dollars to bring it up to code.
Another major mistake that investors might make is deciding to rent the property out even if work still needs to be done. This will lead to failure because you’ll be summoned by the resident over and over again to take care of repairs and maintenance. That resident is going to lose trust very quickly, and the entire rental experience will be stressful for everyone.
There is a formula for success, and if you’re working with an experienced property management company in San Antonio, your property managers will share that formula with you. The formula is pretty simple:
Find the property.
Make sure the property matches your investment goals.
Have a good product before you put it on the rental market.
Market and advertise your property widely to the right people.
Keep your expectations realistic.
If you can follow that formula, you can avoid failure.
Surround yourself with professionals before you buy the investment. Owners who want to rent a property for more than the San Antonio rental market demands usually did not consult with a property manager before making the purchase. They often set a price based on their mortgage payment or the amount of cash flow they want to achieve. The market changes from season to season and year to year. What you saw homes renting for last summer may not be the same as what they are renting for this winter.
Put your rental property in the hands of a qualified team that can help you reach your investment goals.
At Mynd Property Management, we provide a comprehensive market analysis to our investors before they buy and rent out a home. Having a current analysis is very important to your success.
Avoid Emotional Involvement with Your Property
It’s easy for investors to get emotionally attached to their properties, especially if they lived in the home themselves. Some people rent out the house they grew up in or they have a home they’ve inherited from a family member. It’s hard not to be sentimental because there’s an emotional value there.
You have to let go and see the bigger picture. Once you rent out the property, it becomes a business.
Treating it like a business means avoiding fair housing discrimination, understanding the requirements of the Texas property code, and working through the different regulations for service and emotional support animals. A lot of laws protect your residents, and not a lot of landlords know them. That can lead to instant failure.
Hiring a professional San Antonio property management company is the right thing to do. It protects you from failure.
If you’re interested in avoiding the common mistakes that San Antonio investors make, please contact us at Mynd Property Management. We’d love to help you succeed.
We also have other opportunities to connect with us and learn more about investing in San Antonio. You can also visit our Facebook group of investors, which is called Master Mynd. It’s a real estate investors’ club, where you can exchange ideas with other owners. Check out our weekly podcast as well, called The Myndful Investor. We invite leaders in real estate and property management to talk about their success and, more importantly, their failures. There’s a lot to learn from this relatable content.