In last week’s blog, we talked about the two main types of real estate investments.
This week, we’re going to talk about the five steps to real estate investing!
Pay in Cash
If possible, this is the best way to pay for an investment property. You will save thousands of dollars in interest, you won’t have to worry about paying the mortgage each month, and you won’t create unnecessary risk by financing your new investment. However, this isn’t usually a realistic scenario for most people, so make sure that the loan you secure for your new investment has a great interest rate and the monthly payment is manageable, even if you don’t have a renter every month.
Being a property manager is hard enough, so don’t add location into the mix. Make sure that the property you invest in is close to you. You’ll want to do some spot checks on your investment to make sure your renters are holding up their end of the bargain. Even if you hire a property manager to do the day-to-day work, it is nice to be close in case anything goes wrong.
Be Prepared for Risks
Investment properties rarely go as planned. If you have renters, sometimes they turn out to be bad. If you are flipping the house, some things might come up that are unexpected. Always be financially prepared for the what-ifs in investment situations.
Don’t make your first investment property a huge one! Do your research. Talk to other real estate investors to learn about their experiences. Start by renting out a bedroom or space above (or in) your garage. Whatever first step you chose to take, make sure it is manageable.
Hire a Real Estate Agent
Don’t start this journey on your own. Talk to a realtor in the local market that you’re looking to invest in. They will have insight into the homes on the market and which ones might be the best for your needs. Having an agent by your side will also give you the advantage and expertise to get the best deal on the property.
Real estate investing isn’t for everyone. Think about the pros and cons of your situation and determine it is right for you. If you’re ready to take this step, give us a call! Our agents will be happy to help you find your perfect investment property.