Making Money From Property Rentals

A great way to invest your money is in real estate, specifically rental properties. Condo's, apartment buildings, hi-rises, all have the same common denominator - Rent Roll. It's a monthly income that keeps coming every month, and if you take time to find the right property, it pays in the long run.

Rental property income is not a get rich quick scheme. It takes patience to find the right property. Sometimes, it takes alot of networking to purchase the property. You're certainly not interested in fixing Mrs. Johnsons toilet at 3:00 in the morning, so it takes time to find the right property management company you can depend on too.

This article will focus on the long term investments, which are safer and easier to plan for. There are those that can make money on short term ownership, but they are a savvy bunch, knowing exactly when to sell, and precisely what type of property to get for short term. Even they lose money on short term, so unless you're in it for the long haul, be very careful.

Before you start looking for ental properties, the first thing to take care of is your credit score. Banks are as careful as ever to lend out money. So you have to have a decent credit score, and not too much consumer debt like credit cards. You also have to make sure you have enough money to take care of a major repair or two. The tenants, or judge for that matter, is not going to be happy with you when the heating system goes out and you say "sorry, strapped for cash now".

So now it's time to look for some property. First, you would rather be as close to your rental property as possible, so look in an area that you're comfortable with. You also want to make sure the crime rate in the area is low. Vandalism can be costly.

Your first place to look is in the newspapers. Don't just look in the large ones, look in the small niche papers, especially ethnic ones. Also, don't be afraid to approach the owner of a building that looks just perfect to you. There are allways people looking to sell their rental properties. Note that if you see allot of for sale signs, that is a good indication that something in the area is wrong. There might be many vacant apartments, or they might be putting up a cell tower, low income housing unit, or nuclear reactor in the area. On the other hand, if after your investigation no major problems turn up, then you might get a bargain. You just have to have the resources to sit tight until the area builds up again.

When you find the rental property you are happy with, study it well. Buy yourself something to eat, and park outside the building in the A.M. as people go to work. See what type of clientele the building carries. More importantly, stick around late at night. If you get mugged in the process, at least you didn't lose too much on a bad investment.

Don't just jump in because you found a dream apartment building and overpay. In New York, some properties are over 50% overpriced. So you might expect to pay more, but you will never earn a profit on the building until you sell it to another sucker just like you who likes to overpay. Depending on how you want to make money with the building, that might not necessarily be a bad thing.

Property investment from apartments and buildings can be extremely rewarding, and there are lots of people making a nice living from it. Just take your time and do your research. Oh, and make sure you hire a great property management company to help you with your building.


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Jacob Eisenstein is the owner of EK Realty LLC, a N.Y. property management company that specializes in New York City real estate management. Jacob lives in Manhattan, NY, and has been doing property management in New York for over 22 years. His website is http://www.ekrealestatemanagementny.com