Top 10 Tips For Buying First Investment Property!
Category : Buying & Selling Tips
If you are looking for a way to make your hard earned cash grow, then the best way to do it is to invest in real estate. Investing in real estate is a wise investment but only if you do it correctly. If you do not invest wisely you could lose money and that is something that no one wants to do. You must have the passion for learning the trade rules of this business and making the right decisions. Basically, the whole process involves purchase, ownership, management or sale/rental of real estate with the goal of profit in mind. Experience and perseverance will teach you a lot in the process. But it would be worth it to be backed up by lessons learned from people who have already been there.
Every investor has certain goals in mind when it comes to choosing an investment. There are a lot of investment properties in the market right now that are ripe for the taking. It only needs a dedicated investor to make the most out of it. But how do you know that this is the best property for your investment? How will you find out about that perfect property for your investment?
If you are seriously considering going through with it, here are some important tips for investing in real estate:
1. Find Out The Right Property To Invest: Always do research on the property you want to buy. Do some checking on the property values, inspect the property, and go and check out the location itself if able. If you want to know more information about locations and properties, get help from California Hard Money Lenders and insurers as they have data that can help you avoid selecting the wrong investment property.
2.Calculate The Total Cost & Your Profits: When considering the budget, make sure you include everything from legal fees, insurance costs, taxation, the connection of utilities, and don’t miss out on adding the price for possible renovation and refurnishing. It’s important to learn the basics of accounting so you can easily read statements and compare prices. Make sure that your plans are profitable on paper.
3.Find A Reliable Property Manager: A reliable property manager can help you with ongoing advice and help you manage your tenants and get you get the best possible value for your property. Your agent should be able to teach you about property law as well as the rights and responsibilities of both you and your tenants. The property manager will also help you find the right tenant, conduct reference checks and make sure they pay their rent on time. They will also take care of any maintenance issues, although you should approve all incurred costs (other than certain emergency repairs), in advance.
4.Understand The Market and Location Where You Are Buying Property: Talk with your local real estate agents and find other properties available in your area. The location is a very important aspect to consider when investing in real estate. Get advice from professionals and make sure to do the leg work. Although you can access a lot of information on the Internet, but professionals can give the right information about demographics, average rents, property values, and suburb reports. It would be good for you to know about the changes that are planned or are happening in your suburb.
5. Choose The Right Mortgage For You: There are many financing options for an investment property, but you will have to choose the best one that can fulfill your financial needs. When choosing between a fixed rate loan and a variable rate loan, go with the loan that is in favor with your circumstance. Carefully consider both options before you decide. It is good that you seek help from a trustworthy financial advisor about this.
6. Utilize The Equity From Another Property: Equity from another property investment can be an effective way to buy an investment property. Equity is the amount of money in your home that you actually own. It can be calculated by working out the difference between what your property is worth and what you owe on the mortgage. For example, if currently worth of your home is $850,000, and you have $350,000 remaining to pay off on the mortgage, you have $500,000 worth of equity. Also, using the equity in your existing home can allow you to borrow more money against your investment property, which will increase your tax deductions.
7. Examine Property Age, Condition And Facilities: The condition of your property and facilities can highly affect the profit of your investment. So you are advised to hire a professional property inspector before purchase to perform a comprehensive inspection of the property in order to detect any potential problems.
8. Make The Property Attractive To Tenants: It’s important to improve your property quality to attract better quality tenants. Make sure that your property’s kitchen and bathroom are in good condition. When it comes to purchasing an investment property, do not only consider what you think is attractive to you because what is attractive to you may not be attractive to someone. Remember, that the investment property will be the home of your tenant and not your own.
9. Enhance Marketing Strategies: Buying an investment property is a business and your eyes are always on the profit. So in order to obtain this in a short time, apply effective marketing strategies. If you now have a property for sale or for lease, get the word out right away. You can advertise in your local newspapers, post flyers, and post on real estate websites. Remember, buyers won’t see the property right away so you better have the marketing done appropriately.
10. Manage Your Risks With Long Term Investment Plan: A long term property investment goal always gives you high-profit returns. So think of property investment as a long term investment and understand that property prices do not rise quickly. When you build up equity then you can decide to purchase your second investment property. Avoid being greedy and balance your goal of financial stability and in enjoying your current life.
The Bottom Line:
Investing in real estate has been profitable for investors for many decades now. Depending on market conditions there’s money to be made most of the times. Although, searching for an investment property may be a dreary task to do but with the help of a trusted Realtor, you will be able to find what you want and even get the best deal out of it.
If you would like to get some individual advice on how to finance your investment property and become a property investor, please feel free to contact Manga Capital Group, Inc. on (310) 734 4044 or email info@magnaloans.com.