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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 crucial to take into account the goal 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's important to Consider if you're ready to invest in Real Estate. Becoming a Land Lord can be a daunting but rewarding task. You will have to be accessible 24/7 prepared to repair any breakdowns that happen in a residential setting. These repairs may eat into profits. If you're handy and love to fix things, then investing in real estate may be a good fit for you. If you are not on the handy side, you can always hire someone to fix and take care of the property. You'll have to keep in mind that you will find good and bad tenants. Some tenants will continue to keep the place nice, but some have the choice 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 thinking about investing in Real Estate. Although Real Estate has the potential to return your income, there's still going to be costs and state taxes involved, along with costly repairs.

Step 3 Acquire the Down Payment

Most investment properties Will require a bigger percentage of down payment compared to owner-occupied properties. At the minimum, 20 percent will likely be needed because mortgage insurance is not available for Investment properties.

Step 4 Take Notice of High-Interest Rates

If You Need to borrow Cash to buy your investment property the loan will most likely have a greater interest rate in comparison with traditional mortgage interest rates. In order to generate income off your investment property, you will have to keep in mind 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 price of Homes which will need to be repaired is relatively low, you will need to choose if you're able to really afford to fix the home. This also includes in the event that you've got the means and expertise to fix up the house. Diving into poorly dilapidated homes is truly a bad idea, and may wind up being a costly money pit.

Step 7 Allergic Running Expenses

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

Step 8 Look for Low-Cost Homes


The more expensive your Investment property is, the more expenses you'll need to pay. It is best recommended to put money into a home with a worth of 150,000.

Step 9 Location is Key


Finding the right location Can affect your investment dramatically. Look for locations with low property taxes, good school districts, very low crime rates, and amenities. These steps can help you consider the pros and cons of investing in real-estate.

Works Cited:

Tim Parker Investopedia. 10 Tips for Purchasing 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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