Can Real Estate Still Be A Great Investment

Investing in Real Estate to Make Residual Income

There are many ways that Real estate may make people money. There are many different types of real estate to invest in. It is important to take into account the purpose of the real estate before making an investment. There are 9 steps to take 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 purchase Real Estate. Becoming a Land Lord can be a daunting but rewarding undertaking. You'll need to be available 24/7 ready to repair any breakdowns that happen in a residential setting. These repairs can eat into profits. If you are 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 could always hire someone to fix and maintain the property. You will need to keep in mind that there are good and bad tenants. Some tenants are going to continue to keep the place nice, while 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 considering investing in Real Estate. Even though Real Estate has the capacity to return your income, there's still going to be costs and state taxes involved, along with costly repairs.

Step 3 Get the Down Payment

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

Step 4 Take Notice of High-Interest Rates

If you have to borrow Cash to buy your investment property the loan will most likely have a much higher interest rate compared to traditional mortgage interest rates. To be able to make income off your investment property, you will need to keep in mind that the monthly loan payment will need to be lower than the rent you are charging.

Step 6 Stay Away from Fixer-Uppers


Although the Cost of Homes that need to be repaired is comparatively low, you will have to decide whether you're able to really afford to fix the house. This also includes if you have the means and expertise to fix up the house. Diving into badly manicured homes is really a bad idea, and may end up being a pricey money pit.

Step 7 Calculate Operating 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 a month then you can expect to pay roughly $1,000 in expenses

Measure 8 Look for Low-Cost Homes


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

Step 9 Location is Key


Finding the Perfect location Can affect your investment dramatically. Look for locations with low property taxes, excellent 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 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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