For many folks, investing in real estate sounds like such an intimidating endeavor. It’s usually the type of investment the affluent usually embark on. Thus, for the average Joe, it’s easy to understand how the first instinct is to turn down an opportunity for real estate investment.
But there are simple ways for you to enjoy investing in property-- and no, you don’t even have to be a big real estate magnate to pull it off.
Purchase a Rental Property
This is one of the most common types of real estate investments, which involves the purchase of a lot with either a residential or commercial structure. Either way, you will need the assistance of a property manager to keep it properly maintained and secure
Don’t expect to earn much at the start, as the rentals will be paying for the mortgage. Once that’s out of the way, monthly payments from your tenants go directly to you. Add the anticipated appreciation of property value, even as you’re still paying off its mortgage, and your investment can pay off handsomely.
Know Your Numbers
You need to consider what the property will cost you outright as well as maintenance and upkeep costs, and how these will impact your cash flow.
There’s the matter of net income, ROI (return on investment), cap rate or the property price, cash-on-cash return, and others. If you were to take out a loan to finance this property purchase, that would have to be included in your computation for costs too.
Then there are also the possible costs for repairs, improvements, and additions. This is actually why having a professional home inspector along with you during the on-site visit is very important. They can point out to you on the spot the sections of the house or other areas within the property that would require some repairs. Of course, hiring this third party professional will also cost you extra as well.
Other transactions that will possibly add to the total cost of your real estate purchase include the entire process of transferring the title to your name, as well as accounting for the appropriate taxes to be applied.
These are crucial pieces of information you need to carefully weigh before diving into any investment, so your long-term financial goals are not compromised. You can rely on your real estate agent to give a fair estimate of the value of any property you may be interested in, and anticipate how it will appreciate in the future.
Take the Leap
Often, many folks miss out on the opportunity to make some headway in their real estate investment plans because they lack the will to follow through. A common excuse is that they are biding their time waiting for the perfect deal.
A reliable real estate agent will tell you that no such thing exists. There is no “perfect” deal in the most absolute sense. There will always be small compromises.
If you really want to get started, find a deal that meets your requirements the most, and then compare its cost with your projected budget. You can always seek guidance and clarification from your real estate agent or business consultant if you have any doubts.
The important thing is to take active steps towards your goal of investing in real estate. The longer you wait, the more expensive it may end up for you, especially if the property you’re looking at is situated in a good area. Be strategic with your timing, but also don’t take too long that you’ll just end up not investing on anything at all.
An experienced agency such as Nu Home Source Realty. LLC can help you achieve your real estate investment goals. Be sure to consult with real estate pros before making your move. Call us today at 866-761-5217 and let us help you with your next real estate investment.