One of the best ways you can secure your financial future is through real estate investing. As President Franklin Roosevelt once said, "Real estate cannot be lost or stolen, nor can it be carried away. Purchased with common sense, paid for in full, and managed with reasonable care, it is about the safest investment in the world." One of the best ways to get started in real estate investing is in single family home rentals. Here's a glimpse into the entire process from purchasing your first property to leveraging it to expand your portfolio.
Find a Property
The key to a good property investment is finding the right property in the right neighborhood at the right price and the right terms. The first step is finding a real estate professional who you trust and who understands your investment goals. He or she will be able to spot deals that are in line with your investment strategy.
You'll want to narrow your search according to location, price, and condition. Using these criteria, your agent can zero in on potential properties.
Your agent has access to MLS listings and can be on the lookout for a good investment. Often foreclosure properties or For-Sale-By-Owner properties offer bargain prices. Finding these properties and guiding you through the complicated and tricky process of acquiring them is where your real estate agent's knowledge and experience will be invaluable.
Analyze the Profitability
Once you have a short list of potential properties, put your emotions aside and run the numbers. You'll need to research current market values, rents, and appreciation for the property's location. Also, look at the condition of the property. How much will it cost you to make the property rentable? Once you have these numbers, you'll be able to predict the home's profitability and level of risk.
Make your Purchase
Your real estate agent can help you find a reputable lender—likely one he or she already has a working relationship with. It's important to work with a lender who has experience with real estate investing.
Your purchasing strategy will be different depending on where you are in life. A young couple just starting out with few funds available will want to find a property whose rent covers or exceeds the monthly expenses. They will want to choose a long-term (i.e., 30-year) mortgage with smaller monthly payments. An older couple who is within 15 years of retirement and can afford a large down payment or does not need cash flow starting out will likely opt for a shorter-term (i.e., 15-year) mortgage with larger payments.
Grow Your Portfolio
Once you've acquired your first investment property, you can begin to grow your property portfolio. The second and subsequent properties will typically become increasingly easier to buy because of the magic of leveraging. You can refinance your first property to get money for a second purchase or borrow against its equity. Another option is to rely on your first property's appreciation and use the profits gained from selling it to purchase one or more properties. Don't let your equity sit. Use it to grow your property investment portfolio and secure your financial future.Share
27 October 2016
Apartment living can be a trial sometimes. Even the best apartment complexes can have problems, such as noisy neighbors. I experienced this firsthand with my newest neighbors. Between their partying and trashy existence, I was ready to go crazy. Late one night when they were being particularly noisy, I started researching my rights as a tenant. I found out I did not have to live with their inconsiderate behavior. As a public service, I decided to help others through this blog with their neighbor problems. Whether you are dealing with a landlord that will not do any repairs or bad neighbors, I can help.