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Investing in Real Estate to Make Residual Income

There are many ways that Real estate can make people money. There are many different varieties of real estate to put money into. It's crucial to consider the goal 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're Ready

It is important to Consider if you are ready to purchase Real Estate. Getting a Land Lord could be a daunting but rewarding undertaking. You'll need to be accessible 24/7 ready to fix any breakdowns that occur in a residential setting. These repairs may eat into profits. If you're handy and want to fix things, then investing in real estate may be a good fit for you. If you are not about the handy side, you could always hire someone to fix and maintain the property. You will have to keep in mind that you will find good and bad tenants. Some renters are going to keep the place pleasant, while others have the choice to waste it out.

Step 2 Pay Down All Debts Before Making Real Estate Investment

Ensure student loans, Medical bills, and credit card debt is well managed and paid down before considering investing in Real Estate. Even though Real Estate has the potential to return your income, there's still likely 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 compared to owner-occupied properties. At the minimum, 20 percent will likely be needed because mortgage insurance isn't 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 more than likely have a much higher interest rate compared to traditional mortgage interest rates. To be able 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 price of Homes that will need to be repaired is comparatively low, you'll have to decide if you're able to really afford to fix the home. This also includes if you've got the means and expertise to fix up the home. Diving into poorly dilapidated homes is really a bad idea, and may 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 per cent rule when calculating. In the event the charging rent of $2,000 a month then you can expect to pay roughly $1,000 in costs

Measure 8 Appear for Low-Cost Homes


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

Step 9 Location is Key


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 pros and cons 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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