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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 many different types of real estate to invest in. It is important to consider the purpose of the real estate prior to making an investment. There are 9 steps to take before making an investment in Real Estate.

Step 1 Make Sure You're Ready

It is important to Consider if you're prepared to invest in Real Estate. Becoming a Land Lord could be a daunting but rewarding task. You will have 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 love to fix things, then investing in real estate might be a great fit for you. If you aren't about the handy side, you can always hire someone to fix and take care of the property. You will need to keep in mind that there are good and bad renters. Some tenants will keep the place pleasant, while others have the choice to waste it out.

Step 2 Pay Down All Debts Before Earning Real Estate Investment

Make sure student loans, Medical bills, and credit card debt is well managed 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 costs and state taxes involved, together with costly repairs.

Step 3 Get the Down Payment

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

Step 4 Take Note of High-Interest Rates

If you have to borrow Money to buy your investment property the loan will most 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 keep in mind that the monthly loan payment will have to be lower than the rent you're charging.

Step 6 Stay Away from Fixer-Uppers


Although the Cost of Homes which will need to be fixed up is relatively low, you'll have to decide whether you can really afford to fix the home. This also includes if you have the means and expertise to fix up the house. Diving into badly manicured homes is really a bad idea, and can wind up being a costly money pit.

Step 7 Calculate Operating Expenses

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

Step 8 Appear for Low-Cost Homes


The more expensive your Investment property is, the more expenses you'll have to pay. It's best recommended to put money into a house with a worth of 150,000.

Step 9 Location is Essential


Finding the right location Can affect your investment dramatically. Look for locations with low property taxes, excellent school districts, low crime rates, and amenities. These measures can help you think about the ups and downs of investing in real-estate.

Works Cited:

Tim Parker Investopedia. 10 Tips for Purchasing 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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