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. Properties needing significant repair and renovation but are located in hot locations are wise investment. 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. It is also important to be aware of the most important things you have to consider when investing in a real estate property.
It is essential to be prepared to put down a big down payment because mortgage insurance is not available for real estate investment properties, and a twenty percent down payment is required in order 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. It is important to choose the location of the property, to study the feasibility of success, and remember that your profit may differ because tenants comes and go, and it may take some time renting out a vacated unit, most especially if it requires major repairs or renovation. 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. Property taxes must also be considered, because you may discover a huge increase in property taxes if previously, a homestead exemption has been applied. If you are just new in real estate investing, beware of the risks related to buying real estate properties with very poor condition, requiring large-scale improvements, unless if you know someone who can provide quality work at bargain prices, otherwise you may just end up spending too much on unworthy costly repairs. You have to look for properties that only need modest repairs which are priced at below-market rates.
For first-timers in the field of real estate, experts highly recommend starting small, such as buying a single apartment, duplex or condo, to help you learn 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 are not just comfortable doing business with your partners, but also have a clear agreement in managing your investment.