Instead of buying Malibu land in the hope of developing it in the future, there is a way you can almost immediately generate an income from your investment. Buying Malibu rental properties allows you to make an investment that can produce thousands of dollars in monthly income.

However, this is not something you should rush into without knowing the facts. Managing rentals can take up a significant amount of your time. If you do not find the right tenants, your income could also be less than you anticipated. Learn more about rental property investing before you take the plunge.

Considering Your Options

Before you even learn how to pick an income-producing property, you need to decide if this is really the type of investment you want to make. Once you become a landlord, you will be responsible for fielding tenant complaints, chasing down late payments, making repairs, paying property taxes and performing other tasks.

If you do not relish the thought of all of these responsibilities, another type of investment might be better for you. If you are up for the challenge, or you are willing to hire a property management company to help you with these tasks, buying a Malibu rental property might pay off for you.

Evaluating a Malibu Rental Property

You need to evaluate each income-producing property in the Malibu real estate market before you can narrow your list down to just a few Malibu rental properties.

One of the most important things to consider is a property’s rent roll, which is the total amount of rent collected each month. If a property has 10 units that rent for $1,500 each, the monthly rent roll is $15,000.

However, you also need to ask how many units in each building are filled. If only three of the 10 units have tenants, you might want to move on in search of a different property.

Ask to see copies of past utility bills and tax bills so you can get an accurate estimate of your potential expenses.

Making the Transition

Once you make a purchase, you need to make your transition into the role of a landlord as smooth as possible. If you only have a few units to manage, try to meet all of your tenants. Introduce yourself and let tenants know what they should do if they encounter problems.

If you have several vacant units, start marketing them so that you can stop missing out on the income they could produce. If you find this transition overwhelming, consider hiring a Malibu real estate property management firm. An experienced property manager can help you find new tenants, collect rent, enforce your lease agreements, start eviction proceedings and keep your rental property in good condition.

You are the only one who can decide if investing in an income-producing property is right for you. Before making a decision, review all of the available information and ask your attorney or financial advisor any questions you may have about this type of investing.

Russell Grether of Compass Real Estate is a Malibu real estate agent based out of Malibu, CA. He specializes in Malibu real estate, Malibu homes for sale, Malibu properties, Malibu Land for sale, Malibu rentals and surrounding area real estate from Montecito to the Pacific Palisades.