As the market is slowly but surely gaining momentum once again, more and more investors are looking to acquire investment properties. However, big risks are involved and not everyone will be as profitable as the other—in fact, it takes many years before substantial revenue is made. Here are some important tips to consider before making that first purchase of a potential investment property:
Study the Numbers
Down payment, interest rate, expenses—these are just some of the numbers that you have to thoroughly familiarize yourself with. The only way you can be truly prepared to enter the market is by educating yourself and gathering enough data to serve as your guide to saving and earning more.
Among the most common tips from experts include having a sizeable down payment, which could help you in acquiring a better interest rate. As for expenses, always go by the “50% rule,” which states that half of the income you receive will go to various expenses such as utilities, repairs, and other whatnot. What’s left of it is used to pay the mortgage and the rest is cash flow.
With the growing number of homeowners wanting to get rid of their properties, owner financing has become more available and common. While sellers are just looking to sell, you can talk them into lowering or helping you finance the down payment. The idea is to present them an offer with terms that are beneficial both for you and for them.
Consider Professional Assistance
In this day and age, it is very risky to just enter the investment home market without any reliable backup. In order to really know which properties are worth investing in and which ones would provide you with the biggest potential for buying-selling, then it is a good idea to consider seeking the help of a real estate agent in your area. Real Estate agents are your go to people who truly know market trends and can assist you in different aspects of your investment plan. With the experience they have, you’re bound to make successful decisions on real estate investing.
At the end of the day, it’s all about reducing your risks and increasing potential returns on your investment. Real estate is a very lucrative long-term business, so long as you’re able to come prepared as you enter the game. Never go in blindly and too much information is never enough.