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Predicting Profits From Your Investment Property

An investment is a risk; there’s no guarantee of profit. Some investments are riskier than others. For better or worse, profits from your investment property are one of the more difficult ones to predict. While predicting the market is incredibly difficult, there are a few things you can do to manage better and predict profits from your investment property. 3 actions you can take to manage better and secure profits from your investment property Research Your Neighborhood Even if two neighborhoods are right next to each other, it’s important to know that each neighborhood has its own real estate market – its own values, its own turnover rates, its own desirability. If you’re looking to invest in property in your current neighborhood, you might be at a slight advantage for predicting the real estate market. At the very least, you should have at least general understanding of the market you’re looking to invest in. Make sure you take the time to calculate rent prices, use neighborhood search tools, analyze property reports, visit online listing sites, and talk to a local real estate agent. Know Your Property Knowing your neighborhood is important, but knowing as much as you can about your investment property maybe even more so. Knowing as much as possible about your property makes it easier to calculate rent prices that will maximize your earning potential.  Rental properties in different neighborhoods will command different rent rates, even if the units are the same size. Take your amenities into consideration, along with property updates. The more amenities a property has and the more remodeled it is, the more you can charge for rent.  Estimate Potential Earnings Finally, once you have as much information as possible about your property, you can start estimating your potential earnings. Calculate rent prices at current market rent and figure out how much your rental property would be able to bring you in a given month. Don’t forget to subtract expenses, like maintenance and taxes. You’ll also want to account for times when your property may be vacant between tenants. Estimated earnings can also help you understand if updating the property is worth the cost. Knowing just how much you can earn through your rental property can be complicated. These three steps can help you start. For more information on real estate investment; or to see what your rental may be worth with a rental rate calculator, contact True Property Management today – 866-957-6677. Source: …

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Can You Use a VA Loan for Investment Property?

VA loans offer veterans a convenient way into the property market. As they’re backed by the Department of Veteran Affairs, applicants can get away with no credit score minimum and no money down. But what about investment properties? Are you able to use a VA loan for investment property or multi-unit homes?  Short answer — The VA loan program is designed to assist veterans, and military members find a home they will use as their primary residence. As such, you cannot use the program to shop for an investment property, meaning one you intend to repair and flip immediately or one you plan to rent out wholly. However, that does not mean you cannot earn money from a VA-financed property entirely. To use a VA loan for an investment property, you will need to fulfill the following three requirements: 1. You’ll need to have military service To even consider a VA loan, property investors must make sure they meet the program’s military service requirements. Meaning, you (or your spouse if you’re co-buying) must be an active military member or veteran. You also should have clocked a specific number of days within the military, counting on once you served. The requirements are pretty specific based on whether your service was during wartime or peacetime, so check the charts at VA.gov to make sure you’re eligible before going further. If you ultimately find yourself applying for a VA home loan, you’ll have a Certificate of Eligibility from the Department of Veterans Affairs. 2. You have to live on the property Have you ever heard of a strategy called house hacking? That’s what you’ll need to do in order to use a VA loan for an investment property. One of the more important VA loan requirements is that the borrower uses the house as their primary residence. Meaning, if you propose to use the program to buy a multifamily property, you will need to live in one of the units. You’ll also have to move into it within 60 days of closing on your loan. 3. Your property cannot have more than four single-family units VA loans can only be used on properties with up to four units. If you go above this, your rental property won’t qualify for financing. Meaning duplexes, triplexes, and quadplexes are all fair game. But big apartment complexes? Definitely not. Using rental income to qualify for a VA home loan If you and your property meet these requirements and plan to rent out some units for extra money, you might use that income to help you qualify for the loan. To do this, you’ll need to have cash reserves to cover at least six months of mortgage payments and documented experience as a landlord. Meet both those qualifications, and you can collect 75% of rents previously collected on the property or 75% of the rent an appraiser projects you can ask for each unit. Article Courtesy Of: Gabriel Merchen, …

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