Stuart Drossner Real Estate Investment 101: Important Things to Consider When Buying Investment Property
The housing market has subsequently hampered by too few properties, and there are many buyers with limited choices, increased prices, that results in bidding battles in hotter markets. This kind of information is valuable to every real estate investor because it greatly affects your decision making when it comes to buying an investment property. Homes needing significant upgrading and significant repairs but are located in or locations may be wise investments. Whether you are considering buying a multi-unit complex for rentals or a house so you can sell it in the future after renovating it are all acceptable and valid reasons to engage in real estate investment. There are important things you must consider before purchasing a real estate investment.
Mortgage insurance is not available for real estate investment properties, so you must be prepared for a huge down payment, and it is usually twenty percent to get traditional financing. As a real estate investor, you need to have enough savings needed for handling unexpected repairs, and there are also challenges opting for landlord services as well before the rent checks start coming in. Choosing the right location of your rental property is crucial to ensure that tenants come and go once a unit is vacated, and profit varies most especially if a unit can be occupied just yet because it needs major repairs or renovation. You have a responsibility to pay utility bills, mortgage, insurance and property taxes, unless otherwise indicated in the lease contract, previous you must set aside a portion of your profit for these important matters. The amount of property taxes depends on the type of property and how long it has been kept, so it’s important to consider property taxes when investing in a real estate property, because you may discover a huge increase in property taxes if previously, a homestead exemption has been applied. If you are a newbie in real estate investments, beware of the risks of investing in real estate properties that require large-scale improvements, unless if you know a company who can provide quality work at bargain prices, because otherwise, you’ll end up spending too much on costly repairs. You have to look for properties that only need modest repairs which are priced at below-market rates.
Starting small, especially if you are new in the business is what real estate experts recommend, such as buying a single apartment, duplex or condo, to help you stay grounded in the process of investing in real estate, and then decide if you are willing to handle a larger scale. You may consider enlisting co-investors if you cannot afford to buy a property on your own, but you have to make sure you’re comfortable doing business, with a clear agreement in managing your investment.
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