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Investing in Real Estate to Make Residual Income

There are many ways that Real estate may make people money. There are several different types of real estate to invest in. It is important to take into account the purpose of the real estate before making an investment. There are 9 steps to consider prior to making an investment in Real Estate.

Step 1 Make Sure You Are Ready

It is important to Consider if you are prepared to invest in Real Estate. Becoming a Land Lord can be a daunting but rewarding undertaking. You will need to be accessible 24/7 ready to fix any breakdowns that occur in a residential setting. These repairs can eat into profits. If you are handy and love to fix things, then investing in real estate might be a good fit for you. If you are not on the handy side, you could always hire someone to fix and maintain the property. You will need to keep in mind that there are good and bad tenants. Some renters are going to continue to keep the place nice, while some have the option to trash it out.

Step 2 Pay Down All Debts Before Making Real Estate Investment

Make sure student loans, Medical bills, and credit card debt is well handled and paid down before thinking about investing in Real Estate. Even though Real Estate has the capacity to return your income, there's still going to be expenses and state taxes included, together with costly repairs.

Step 3 Get the Down Payment

Most investment properties Will demand a larger percentage of down payment compared to owner-occupied properties. In the minimum, 20 percent will be required because mortgage insurance is not available for Investment properties.

Step 4 Take Notice of High-Interest Rates

If you have to borrow Cash to purchase your investment property the loan will more than likely have a much higher interest rate compared to traditional mortgage interest rates. In order to make income off your investment property, you'll need to remember that the monthly loan payment will need to be lower than the rent you are charging.

Step 6 Stay Away from Fixer-Uppers


Although The price of Houses that will need to be fixed up is relatively low, you'll need to decide if you can really afford to fix the house. This also includes if you have the means and expertise to fix up the home. Diving into badly dilapidated homes is truly a bad idea, and can end up being a costly money pit.

Step 7 Calculate Operating Expenses

It's important to know The expenses of your new investment property. Use 50 per cent rule when calculating. In the event the charging rent of $2,000 a month then you can expect to pay around $1,000 in costs

Measure 8 Appear for Low-Cost Homes


The more expensive your Investment property is, the more expenses you'll need to pay. It is best recommended to put money into a home with a value of 150,000.

Step 9 Location is Essential


Finding the right location Can impact your investment dramatically. Search for locations with low property taxes, good school districts, very low crime rates, and amenities. These measures can help you think about the pros and cons of investing in real-estate.

Works Cited:

Tim Parker Investopedia. 10 Tips for buying Your First Rental Property. [Internet] 2017 [Cited 4 Dec 2017] Available from: https://www.investopedia.com/articles/investing/090815/buying-your-first-investment-property-top-10-tips.asp

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