Best Factors To Consider Before Investing In Real Estate

Investing in Real Estate to Make Residual Income

There are many ways that Real estate can make people money. There are many different varieties of real estate to invest in. It's important to consider the purpose of the real estate before making an investment. There are 9 steps to consider prior to making an investment in Real Estate.

Step 1 Make Sure You're Ready

It is important to Consider if you're prepared to invest in Real Estate. Getting a Land Lord can be a daunting but rewarding undertaking. You'll have to be available 24/7 ready to fix any breakdowns that happen in a residential setting. These repairs can eat into profits. If you're handy and want to fix things, then investing in real estate may be a great fit for you. If you are not about the handy side, you can always hire someone to fix and maintain the property. You'll have to remember that there are good and bad renters. Some tenants will continue to keep the place nice, while some have the option to waste it out.

Step 2 Pay Down All Debts Before Earning Real Estate Investment

Make sure student loans, Medical bills, and credit card debt is well managed and paid down before considering investing in Real Estate. Although Real Estate has the capacity to return your income, there's still likely to be expenses and state taxes included, along with costly repairs.

Step 3 Get the Down Payment

Most investment properties Will require a bigger percentage of down payment in comparison with owner-occupied properties. At the minimum, 20 percent will be required because mortgage insurance isn't readily available for Investment properties.

Step 4 Take Notice of High-Interest Rates

If you have to borrow Cash to purchase your investment property the loan will more than likely have a greater interest rate compared to traditional mortgage interest rates. To be able to generate income off your investment property, you will need to remember that the monthly loan payment will have to be lower than the rent you are charging.

Step 6 Stay Away From Fixer-Uppers


Although the Cost of Homes that will need to be fixed up is relatively low, you will need to decide whether you can really afford to fix the home. This also includes if you have the means and expertise to fix up the home. Diving into poorly dilapidated homes is really a bad idea, and can end up being a pricey money pit.

Step 7 Allergic Running Expenses

It is important to understand The expenses of your new investment property. Use 50 percent rule when calculating. If your charging rent of $2,000 per month then you can expect to pay around $1,000 in expenses

Step 8 Appear for Low-Cost Homes


The more expensive your Investment property is, the more expenses you'll have to pay. It is best recommended to invest in a house with a value of 150,000.

Step 9 Location is Key


Finding the Perfect location Can impact your investment dramatically. Look for locations with low property taxes, good school districts, low crime rates, and amenities. These measures can help you think about the pros and cons of investing in real-estate.

Works Cited:

Tim Parker Investopedia. 10 Tips for buying Your First Rental Property. [Internet] 2017 [Cited 4 Dec 2017] Available from: https://www.investopedia.com/articles/investing/090815/buying-your-first-investment-property-top-10-tips.asp

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