Buying a Pleasanton rental property as a real estate investment is a great idea when you’re growing a portfolio or establishing the foundation needed for long term wealth, but here’s an important truth that you need to consider: You’re not going to make any money with cash flow. A new investment property in Pleasanton will require a monthly contribution from you, even with residents paying rent. Rental property investments in this market are long term investments. If you become a real estate investor thinking you’re going to get rich quick - you aren’t. There’s a lot to consider before you invest in a Pleasanton rental property, and we want to help you feel prepared.
How to Earn Money with a Pleasanton Rental Property
Most real estate investors usually get into rental properties because there are four benefits to owning residential real estate:
- Cash flow
- Appreciation
- Tax deductions
- Principal pay down
In other rental markets across the country, investors focus on cash flow. They want to earn more than they spend every month. In Pleasanton and the Tri-Valley area, that’s basically impossible. Unless you’ve paid off your mortgage and you own the property outright, your expenses are likely to be more than your rental income every month. We have worked with owners who have paid off their houses completely, and thus are no longer incurring a monthly mortgage payment. Their property taxes were still due, and they had to pay for insurance and maintenance, but generally their rental income more than covered all of that. Without that mortgage payment, they were in an ideal position to earn cash flow. You may get there with your own property, but it will take time. Once again, you won’t find cash flow in the Pleasanton market until you've paid down the mortgage.
Focus on Appreciation, Taxes, and Principal
So, why invest in Pleasanton if you’re not going to earn any positive cash flow right away? Real estate continues to be one of the best asset classes for your investment dollars. You won’t find cash flow in the Pleasanton market, but you will have an asset that’s appreciating significantly. Property values in the Tri-Valley area are climbing, and that’s going to result in you owning an extremely valuable asset. You’re also getting tax benefits that can reduce your overall liability. And, your tenants are contributing to the costs of your investment. They’re helping you pay down your mortgage, which will eventually lead you to owing nothing on that property. This is why we are not an investor-driven market. No one is buying new property here in order to rent it out the way they might be in Orlando or Dallas or Atlanta. Most of the rental properties we manage are owned by people who bought these homes 10 or 15 years ago. They don’t want to sell because they know that renting out the home will deliver more money and increase their return on investment (ROI).If you find yourself looking for an investment property, however, we can help. We’ll tell you what will work in our market and how to prepare to rent it out.
After You Invest: Leasing, Management, and Maintenance
How can you leverage what you own and maximize what you earn? By working with professional Pleasanton property managers. There is a lot to consider for each property that we manage, and our experience and local market expertise allows us to recommend a maintenance reserve and plan, based on your property’s age and condition. We tell you what the best rental price would be, and we evaluate when you’ll need to replace the roof, the appliances, and the exterior paint so you can better manage your expenditures.
Our industry standards are based on what’s required for the Pleasanton rental market and the best possible residents. You don’t have to do anything once you hand your property over to us. We have the systems, processes, and resources in place to ensure you’re earning as much as possible while we look for ways to keep costs down and residents satisfied. Interested in talking more about the potential of a Pleasanton rental property? Please contact us at Advantage Property Management Services.
