first-page
  • Jitu Property
  • 16 Agustus 2019
  • 531

5 Tips for a Low Stress First Rental Property Investment

You don’t have to be the investor in the photo. Sure, doing anything for the first time can be a little stressful. And, it’s definitely a major investment to buy your first rental home. But, you really can make it happen without going into stress overload. Here are my top 5 tips to enjoy a successful and low stress first rental property investment.

Advice is OK, but Do Your Own Research

Take courses, read investment books, go to a seminar, or any other learning process that helps you to gain confidence to make decisions. I suggest that any books, courses or seminars be about how to select locations, value properties and evaluate the rental market. Your success will be based on your due diligence and most of all buying right in the right area.

Your first rental property investment is best done in your area of residence, where you know what’s going on economically. You want to know that the economy will support today’s decision into the future, as this isn’t a short term strategy. Understand who the major employers are, what drives people to move in or move away, and if things look good into the near future.

Don’t Just Rely on Real Estate Agents

Sure, now and then you can work with a real estate agent who handles foreclosures and get a good deal. Remember though that these will be “listed” foreclosures on the MLS, Multiple Listing Service. You and all of your competitor investors have access to the same information, so competition will likely drive up your cost of acquisition.

If you do your own marketing and locate motivated sellers, you have a greater chance of negotiation a good deal. Another approach is to work with an experienced real estate wholesaler. They are investors too, but they are experts and finding great deals that they can flip to rental property buyers at a below-market value price. Just check their references out and be sure they do know what they’re doing.

Iklan
Iklan

Dijual Unit LRT City Cibubur lantai 19 No. Unit 6 Tipe Studio

Jl. Kesuma Puri Raya , Depok, Jawa Barat

IDR 507 jt

Dijual Unit LRT City Cibubur lantai 19 No Unit 6 Studio A Apartment Nempel Stasiun LRT Cibubur Cukup Booking 5jt Cicilan 2jt an Hi...

Bisa Nego Dijual

 

Know What Will Rent and for How Much

Check with property managers who handle single family homes. Go to the classifieds and check out what homes similar to the one you’re considering are renting for. Are the owners offering incentives like free months? This is usually a sign of a soft rental market or heavy competition, so you may want to try another neighborhood or property type.

Call on ads, drive around, talk to landlords as if you’re a tenant. The most important thing for you to know before the next tip is what you can reasonably and conservatively expect for rental income and low vacancy.

Get the Right Financing & Cash Flow

You need to know all of your costs, including estimating repairs and other maintenance costs. But, the mortgage is going to be your largest cash outlay, so it is your most important cost consideration. You’ll need to put 20% down or more in most cases. For a rental unit you may also pay a slightly higher mortgage interest rate. A great credit history helps in this regard.

Get a firm handle on all of your costs, then see what your mortgage payment with taxes and insurance escrowed will be. Let’s use an example of a $150,000 home with a $32,500 down payment and closing costs. If you can manage to clear even $250/month over cash out of pocket, your return on the actual cash invested is going to be around 9%.

Iklan
Iklan

Dijual Unit LRT City Cibubur lantai 19 No. Unit 6 Tipe Studio

Jl. Kesuma Puri Raya , Depok, Jawa Barat

IDR 507 jt

Dijual Unit LRT City Cibubur lantai 19 No Unit 6 Studio A Apartment Nempel Stasiun LRT Cibubur Cukup Booking 5jt Cicilan 2jt an Hi...

Bisa Nego Dijual

Lock in Equity at the Closing Table

NEVER buy at retail market value. If you can’t get the home at a 10-20% discount to its current market value, don’t do the deal. You want to leave the closing table with that equity as either future profit or a cushion should you have to sell before your initially planned liquidation date.

If you’re going to work with a wholesaler who you may meet at a local investment club, be clear that you’ll want to see their valuation calcs and you’ll check them with your own. You give them your requirement. If it’s 15% below market value, then they will know what they have to deliver.

Source : huffpost

Berita Terkait

Iklan
Iklan

The Lagoon Park Tipe Caviana Blok E1 No. 7 Kab. Bogor Jawa Barat

Lagoon Park (Caviana) Blok E1 No. 7

1,464 M

The Lagoon Park Carnia Blok E1 No 7 Tipe 69 Luas Bangunan 69 Luas Tanah 60 4 Kamar Tidur 2 Kamar Mandi

Bisa Nego Dijual
Iklan
Iklan

The Lagoon Park E8 No. 6 Tipe Evia Kab. Bogor Jawa Barat

Lagoon Park (Evia) E8 No. 6

845,1 jt

The Lagoon Park Evia E8 No 6 Tipe 40 Luas Bangunan 60 Luas Tanah 40 2 Kamar Tidur 1 Kamar Mandi

Bisa Nego Dijual
Iklan
Iklan

Rumah Dijual The Lagoon Park Tipe Caviana Blok E1 No. 6 Bogor

Lagoon Park (Caviana) Blok E1

1,464 M

The Lagoon Park Carnia Blok E1 No 6 Tipe 69 Luas Bangunan 69 Luas Tanah 60 4 Kamar Tidur 2 Kamar Mandi

Bisa Nego Dijual