I’ve wanted to buy an investment property for a while. It looks like anyone who has money in retirement also got the foresight to buy real property to rent out. However in my price range, no property will be perfect. I want someone to tell me how to purchase accommodations property – to hold my hand and help me choose which place to buy. But since that’s not heading to occur, I figured the next best thing was requesting expert David Meyer for some helpful tips.
Not only will Meyer own three investment properties, but he’s also the vice leader of growth and marketing at BiggerPockets, the world’s largest resource for real estate investors. I hopped on the phone with Meyer to go over why is a good local rental property. Here are nine steps he thinks every budding property trader should take. The very first thing you must do, Meyer said, is get to know your market by speaking with local real estate investors. You can look for meetups, such as the ones with this BiggerPockets list, or search for real estate associations in your area.
“One of the things people underestimate is the power of the network,” said Meyer. These connections could provide insight and advice customized to your area as well as leads on properties. Then it’s time to contact a lender to find out the loan and interest rate you’ll be eligible for. Meyer called this step “understanding your borrowing position,” and he said you should do it before choosing the property.
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- Income from life insurance and endowment contracts
- The Overview of Financial Studies, Vol. 20, No. 3, 813-857
- So how exactly does this whole large financial company thing work
- Decide which kind of investor you want to be
- Prepare a summary statement on audit results
That way, before you get worked up about a listing, you’ll know very well what your loan payment will be – rather than finding later that the monthly payments are higher than you expected. Now it’s time to think about who you’ll lease to – and the kind of community that will interest renters. “You don’t want a dingy studio in the middle of an upscale suburban community,” Meyer explained. Meyer, for example, invests in neighborhoods filled with young working specialists. By purchasing properties that are “appropriate for the certain area,” he said, it’s simpler to find quality tenants.
We all love Joanna Gaines from it show Fixer Upper. But also for a newbie buyer, that type of property probably isn’t the smartest strategy to use. “If it’s cosmetic – color, tile, hardwood flooring – that’s just your effort and is a great way to make money when you’re getting started,” said Meyer. Once you’ve found an investment property you like, it’s time for you to learn everything you can about any of it.
First and foremost, you should work out how much income you can expect to create from the local rental property. If the property is already rented out, ask the owner for its rental background – and then compare those rates to others in the region to make sure the owner is being honest with you. If it was an owner-occupied property previously, you can check Craigslist for accommodations that are similar in proportions, amenities, and location. Learning how much they’re renting for will provide you with a better notion of what you could charge.