With every property you buy, you should have a plan. Not all of these plans will be executed with the precision you would like to see, but a plan will give you a blueprint for how you want the immediate and long term circumstances to go. Things will change in the real estate market on a month to month basis, but if you have a plan and a vision in place, you will be better equipped to deal with changes and keep the focus on your goals. Life can throw a monkey wrench at you at any given time, but the more prepared investors and the ones with a better eye on the future will be the ones that are most successful.
If you are already a few years into rental property ownership, it is not too late to think about the future. Most bad decisions are made in haste and made without proper consideration. Start with the most basic of questions: what is your goal with the property? Do you want to continue to rent until it is paid off? Are you strictly looking to hold only until you hit a certain number you can sell for? Would you want to pull some equity out in the future and continue renting? There are many different options and many different branches of those options. The deeper you can get in them, the more prepared you will be.
If you haven’t bought yet, the most important factor is and always will be the location of the property. Anyone reading this is probably aware of that. The location of a rental property is everything. You may be able to rent out a property in a less desirable location for the short term, but when the market shifts or it is time to sell you will be disappointed with the results. Properties in better locations are more immune to dips in the market and will give you the best chance to always get top dollar. They will also be less immune to vacancy issues that can quickly ruin any positive returns in just a few months.
Five or ten years may seem like it is far off, but it will be here before you know it. Think of where you were and what you were doing ten years ago. Now think of how quickly ten years in the future will come. Most investors will shy away from thinking about this – opting to deal with it when that time comes. In order to make the best decisions for the future, you should start thinking about it now. Any work you do, upgrades you make and appliances you buy should all have the future in mind. If you don’t have a plan of what you want to do in the future, you will end up not spending money wisely or wasting it all together.
Prepare for every rental scenario and what you really want out of the property 5, 10 and even 20 years down the road. It will be here sooner than you know it.