People are increasingly valuing income property as a viable source of income, in fact according to a recent study by Bankrate real estate is the preferred long-term investment for the majority of Americans.
If you are influenced by this trend and want to prepare to enter the real estate market, you should consider following these top five rental property investment tips.
1. Arrange your finances
There are numerous options for financing your investment. You might consider getting mortgage loans while you’re planning. Each loan option has its own set of advantages, some of which may or may not be appropriate for your financial situation and goals. However, there are a few things you should think about before applying for that mortgage loan. To begin with, as a beginner investor, it is best not to carry debt in your investment portfolio, so if you have a student loan or unpaid medical bills, make sure you have cleared that out before you begin investing. you’ll also need to consider that Buying investment properties will necessitate a larger down payment (at least 20%).
2. Is Being a Landlord Right for You?
Hiring a real estate agent is critical for a beginner in the real estate market. Experienced real estate agents provide you with market knowledge that you may lack at first. Many of the stressful aspects of buying an investment property, such as paperwork and negotiations, will be handled by your agent.
If you’re thinking about investing in the South Bend area Val’s Property Management has been serving that area for many years. Their experience and service have made them one of the top management companies in South Bend for both landlords and renters. Consider giving them a call or view their current listings!
3. Locate the Ideal Location for Your Rental Property
When looking for your first rental property, you want to make sure you don’t end up in the wrong neighborhood. A city or location with a growing population and a revitalization plan in place could be a good place to invest. A profitable rental property will be located in a neighborhood with low property taxes, a good school district, and plenty of amenities such as parks, malls, restaurants, and movie theaters. Furthermore, a low-crime neighborhood with public transportation and a growing job market may have a larger pool of potential renters.
4. Home cost
Market experts would advise you to choose the least expensive house possible, as the higher the cost of the home, the higher your ongoing expenses will be. Some real estate experts advise starting with a $150,000 home in a desirable neighborhood.
5. Calculate Your Profit
How profitable will your investment be? As an investor, you’ll think about how much money you’ll get back for every dollar you put in. Experts estimate a 6% return on investment for your first year as a landlord; this percentage is considered healthy as long as it rises over time.