Owning investment property is a great way of earning passive income. This is one of the primary reasons why many people are getting into real estate investment. However, you must take careful measures when it comes to selecting rental properties. We will now go over several tips that can help you find the right investment property.
Networking with real estate agents will help you find great deals in your targeted area. If you want to take your investing to the next level, you should consider joining a real estate investors club. This will give you a chance to meet other investors and secure properties for your portfolio.
Establish a Lending Source
It’s now time for you to find a reliable lending source. You can work with a private lender or a hard money-lender. If you cannot find a lender, you should turn to a mortgage broker. An experienced mortgage broker has multiple funding sources that can fund your deals.
Choose Neighborhoods with Young Working Professionals
It’s vital for you to concentrate on investing in neighborhoods filled with young working professionals. When you purchase properties in these areas, you will not have any trouble in finding quality tenants. Good tenants have the tendency to pay their rent on time.
Stay Away from Fixer-Uppers
If you are a novice investor, you should stay away from fixer-uppers. You will be better off buying properties that need minimal work.
Calculate Your Monthly Rental Earnings
You must figure out how much money you will be able to earn from the property before acquiring it. Check out the rental rates for that area. You can call the rental listings on Craigslist. This will give you an idea on how much to charge your tenants.
Determine Your Expenses
Many real estate investment teachers fail to tell their students that fifty percent of their rental property income will go to expenses. Please keep in mind that this does not include the loan.
Let’s say you are charging your tenant $2,500 per month to live in your property. It’s safe to say that $1,250 will go to your expenses. If your mortgage payment is $700 per month, your monthly cash flow will be $550.
Buying investment properties will put you in place to generate dependable passive income. Finding the right investment property can be done with ease if you follow the six tips above. They can help you avoid the pitfalls associated with real estate investing.