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real estate investment

6 Signs You’re Ready to Buy an Investment Property

Nowadays, investing in real estate to gain passive income piques the interest of many. And how would it not! With today’s competitive market and constantly rising prices, investors’ gain is indefinite. However, if you want to set yourself up for financial success, you have to make sure you’re ready to bite the bullet. You have to remember that buying an investment property is so much more than just having enough money to do it. You have to have proper knowledge about real estate, current market trends, and predictions for that market in the future. Only when you’re armed with both knowledge and money will you be able to do this investing the right way. Therefore, let’s talk about the six signs you’re ready to buy an investment property! You have clear investment goals There are several ways to invest in real estate: fix-and-flip, buy-and-hold, and wholesale. Therefore, investors should have a clear investment plan in mind before making a purchase. This means you need to do your research and pick the investment strategy that suits your budget and financial goals. So, let’s elaborate a little on the possibilities you have. A “fix-and-flip” method is purchasing a house, renovating it, and immediately selling it for a profit. A “buy-and-hold” approach would entail keeping the property in your portfolio for the long term and renting it out. In wholesaling, you would sign a contract with sellers to assist them in finding a buyer for their property. Finally, the investment plan you adopt will impact the type of investment property you intend to buy. This is why it’s critical to define your financial goals before you buy an investment property. You have equity  Homeowners can frequently leverage the equity in their primary property to acquire a loan or even cover the deposit. This implies you may not have to worry about a downpayment as you did for your primary home. Let’s elaborate, shall we? Suppose we know that the equity represents the value of your property minus the amount you own for it. In that case, we can easily find out how much of the equity we’ll be able to deposit towards the investment property. So, if your house is worth $700,000, for example, and you still have to pay $400,000, this means your equity is $300,000. When deciding whether to provide you access to your equity, your bank will consider several variables, including any other loans you may have, your age, income, and the number of children you may or may not have. If you’re approved, you will typically be able to borrow up to 80% of the value of your primary property, minus what you still owe. Therefore, using the preceding example, you will be able to deposit up to $160,000 of your entire equity towards an investment property you want to buy. Since you are effectively using your present property as security for your investment property, this can be risky. This implies that both houses will be on the line if things go wrong. Therefore, before making any decisions, make sure you are informed of the consequences and risks and thoroughly examine your alternatives with a professional. You have savings  Sadly, unlike with a primary house, there is no such thing as purchasing an investment property with little or no money down. This is because government-backed loan programs (such as FHA) aren’t often accessible for investment properties. Therefore, you’ll need to have some money saved up in your bank if you want to buy an investment property. In fact, experts recommend saving 30 to 35 percent of your anticipated buying price. Most banks need a 20% down payment and up to three months of spending in savings. You should also have enough money left for repairs to prepare the properties for occupancy. Whether you like it or not, lenders consider the number of liquid assets you’ll have after making your down payment and closing costs. They do this to ensure that you’ll be able to make your mortgage payments even if something unforeseen occurs to your regular salary. While lenders want their borrowers to have a particular number of months’ worth of reserves following each transaction, the criteria for investors are frequently harsher. Therefore, you need to be armed with serious money before buying anything. You know how to do the real estate math  Buying an investment property should be a mathematical calculation at its foundation. Therefore, before entering the market, prospective investors should get to know and understand the metrics they’ll need. Fortunately, there are many rules of thumb investors can rely on during the process of buying an investment property. So, here are some of the facts nobody will tell you about that will help you predict your profits: 50% of a single-family home’s total rental revenue is spent on running expenditures such as taxes, vacancy, insurance, turnover, and maintenance. You can get the time it takes to recuperate your investment if you divide 72 by a predetermined yearly rate of return. If you can rent out your home for 1% of the purchase price, you can meet your mortgage payments with the proceeds. You’re ready for extra responsibility  While equity is one of the best pros of investing in a rental property (or buy-and-hold investment property), added responsibility is definitely a big con of this type of investment. Being a landlord requires a significant time commitment. If you’re prepared to screen eligible renters and cope with the maintenance of your rental property, you’re ready to buy it. If not, then you should invest in something else. Of course, you can always contact a reliable property manager, but that doesn’t mean you don’t have to deal with your investment property. After all, it’s your property, not theirs.  Furthermore, even if your objective is to fix and flip a house, you’ll have additional duties. Your tasks will include budgeting, supervising contractors, and managing schedules in such a situation. However, in any case, it’s critical to realize that the passive income that comes with purchasing an investment property is accompanied by additional work. Therefore, before proceeding with your purchase, ensure that you are prepared to take on that work. You found a team of reliable professionals  As an investor, you must have a solid team that includes real estate, finance, maintenance, repair contractors, and property managers. In addition, you’ll need a team of experts to help you through the purchasing process. Buying an investment property is no joke. Therefore you need to secure yourself the best experts in town! As you start to put together your team, you’ll have to do your homework. Proper research will do the job. Thus, read online reviews, ask family and friends, meet three or more professionals in person, etc. Once you have gathered all the information you need, it’s time to hire all these experts! Conclusion Yes, if you want to buy an investment property, you’ll have to invest more than just your money. You’ll have to gain profound knowledge about real estate and finances, as well as invest your time and prepare for a lot of extra work. You need to understand one thing: buying an investment property isn’t the same as buying a primary home. The bank will treat you completely differently. Therefore, prepare for expensive costs and fewer benefits to make a passive income that can set you up for life. Photo: Article Courtesy Of: Betty …

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How to get started buying investment property

You likely know investing in real estate can be one of the best ways to achieve financial success. However, it is no secret that buying rental properties can be a big step. Fortunately, with the help of True Property Management, you can get started with your first investment property to put you on the path to a more lucrative future. 1. Start With Thorough Research Real estate is all about location. In Southern California, it may seem like anywhere can be profitable. However, in such a competitive market, every investor needs to carefully balance affordability and desirability. Doing plenty of research helps you make more informed decisions about which properties to purchase. 2. Secure Essential Financing Of course, most people don’t have cash lying around to buy investment properties. This is okay. With appropriate financing, you can ensure your property earns a good return on investment without needing to have the capital upfront. In fact, according to, you can even buy investment properties in a number of ways with little or no money. Take some time to research your financing options. Often, the mortgage is the biggest ongoing cost associated with an investment property. Saving yourself even a small amount each month can be worth the work. 3. Obtain the Right Help With the Purchase Process Working with real estate experts can help secure a better deal. Someone who is familiar with residential properties in California can assist you with opportunities you may otherwise miss. Additionally, they can give you some insider knowledge on whether a deal is as good as it looks. Like any other business function, buying real estate is often easiest when you have the right professional services in your corner. A realtor is a big part of this. However, you should also have a good accountant and potentially even a financial consultant. 4. Be Realistic About Your Management Abilities Investment properties aren’t just a matter of purchasing a building and collecting rent, even if your notices are on your best invoice template. Properties need to be managed. Be realistic about how much time you can commit to managing your property. If you are buying a duplex and renting out one unit, it is reasonable to maintain a full-time job while also managing your property. If, however, you are buying a multi unit apartment building, managing all the units may be a full-time job itself. It is often a good idea to acquire some help for managing properties. You can consider hiring someone directly. Alternatively, you may prefer working with a property management company. 5. Make Sure Your Property Is Competitive Finally, you need to think about how competitive your property is with other rentals nearby. For example, dated interiors could set your property back. Similarly, you want to repair any items such as appliances that could present safety issues or address other major aesthetic drawbacks. Hiring a repair service can be a little tricky. However, it is worth the time to research reviews to find the right option and possible discounts. You will also likely need repairs in the future, so building a relationship with the right service provider is a good idea. Get Ready to Buy Your First Property By following the above tips, you can be in a good position to buy an investment property. This could become a lucrative path if you play your cards right. This article is brought to you by True Property Management, which currently manages properties all across Orange County, California. From the beaches of Newport and Huntington Beach to Costa Mesa, Irvine, Orange, Santa Ana, Tustin, Mission Viejo, and everywhere in between. Our tremendous success is the direct result of landlords like you leaving their current management for someone they can trust like True Property Management. Virtually all of our clients were once with another management company. We know and understand your pain because we interview each of our landlords to better understand their needs and make it our mission to best serve you. For more information, please visit our website or contact us …

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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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