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. As a real estate investor, you must be aware of this kind of valuable information, to help you make smart decisions 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. It doesn’t matter regardless you want to buy a house to sell it in the future for higher profits, or a multi-unit complex for rentals, these are valid and acceptable reasons why you shouldn’t be hesitant to invest in a real estate property. It is also important to be aware of the most important things you have to consider when investing in a real estate property.
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. Before the rent checks start coming, you have to also prepare to spend on unexpected repairs, especially if you’re opting for landlord services. You have to remember that income varies in a real estate property because tenants comes and go, and it may take some time renting out a vacated unit, most especially if it requires rehabilitation or repairs. Unless agreed to be paid by the tenant, it is your responsibility to pay the bills, mortgage, insurance, and property taxes, so you have to 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. If you cannot afford to purchase a property on your own, you may consider enlisting co-investors, but you have to make sure you’re comfortable doing business, with a clear agreement in managing your investment.