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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 varieties of real estate to invest in. It is important to take into account the purpose of the real estate prior to 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're ready to purchase Real Estate. Becoming a Land Lord could be a daunting but rewarding undertaking. You will have to be available 24/7 prepared 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 might be a great 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 remember that you will find 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. Although Real Estate has the potential to return your income, there's still going to be expenses and state taxes included, along with costly repairs.

Step 3 Acquire the Down Payment

Most investment properties Will demand 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 readily available for Investment properties.

Step 4 Take Notice of High-Interest Rates

If You Need to borrow Cash to buy your investment property the loan will most likely have a much higher interest rate compared to traditional mortgage rates of interest. In order to generate income off your investment property, you will have to remember 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 need to be fixed up is comparatively low, you'll need to choose 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 poorly manicured homes is really a bad idea, and may wind up being a costly money pit.

Step 7 Allergic Running Expenses

It is important to know 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 around $1,000 in expenses

Step 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 put money into a home with a value of 150,000.

Step 9 Location is Essential


Finding the right location Can affect your investment dramatically. Look for locations with low property taxes, good school districts, very low crime rates, and amenities. These steps can help you think about the ups and downs 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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