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Investing in Real Estate to Make Residual Income

There are many ways which Real estate can make people money. There are many different varieties of real estate to put money into. It is important to consider the goal of the real estate before making an investment. There are 9 steps to consider before making an investment in Real Estate.

Step 1 Make Sure You Are Ready

It is important to Consider if you are ready to purchase Real Estate. Getting a Land Lord can be a daunting but rewarding undertaking. You will need to be accessible 24/7 prepared to repair any breakdowns that happen in a residential setting. These repairs can eat into profits. If you are handy and want to fix things, then investing in real estate may be a good fit for you. If you are not on the handy side, you can always hire someone to fix and take care of the property. You will have to keep in mind that you will find good and bad tenants. Some tenants are going to continue to keep the place nice, but some have the choice to trash it out.

Step 2 Pay Down All Debts Before Earning Real Estate Investment

Ensure student loans, Medical bills, and credit card debt is well managed and paid down before considering investing in Real Estate. Although Real Estate has the capacity to return your income, there's still going to be expenses and state taxes involved, together with costly repairs.

Step 3 Get the Down Payment

Most investment properties Will require a larger percentage of down payment in comparison with owner-occupied properties. At the minimum, 20 percent will likely be needed because mortgage insurance is not readily available for Investment properties.

Step 4 Take Notice of High-Interest Rates

If you have to borrow Cash to buy your investment property the loan will most likely have a much higher interest rate in comparison with traditional mortgage interest rates. In order to generate income off your investment property, you will have to remember that the monthly loan payment will need to be lower than the rent you're charging.

Step 6 Stay Away from Fixer-Uppers


Although The price of Homes that need to be fixed up is relatively low, you will have to choose whether you can really afford to fix the home. This also includes in the event that you have the means and expertise to fix up the house. Diving into badly manicured homes is truly a bad idea, and can end up being a pricey money pit.

Step 7 Calculate Operating Expenses

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

Step 8 Look for Low-Cost Homes


The more expensive your Investment property is, the more expenses you will need to pay. It is best recommended to invest in a house with a value of 150,000.

Step 9 Location is Key


Finding the Perfect location Can impact your investment dramatically. Look for locations with low property taxes, good school districts, 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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