Most people would benefit greatly, from including investing in real estate, as a component of their overall investment strategy. As a Real Estate Licensed Salesperson, for over a decade, I have identified several opportunities, for both, my clients, as well as my own, personal investment portfolio, and believe, when this is done wisely, and in a well - informed manner, is extremely beneficial. With that in mind, this article will attempt to briefly examine, discuss, and review, 8 meaningful, relevant factors, to consider, and pay attention to, in determining, which possibilities, make the most sense, from an investment perspective.
1. Purchase price: Know your budget, and personal limitations. Remember, financing for non - owner - occupied properties, is generally more difficult, and slightly more expensive. Most lending institutions examine the rent - rolls, to see, if the investment makes sense. Be careful to purchase, what you feel comfortable, with!
2. Real estate taxes: When calculating the Return on Investment, or ROI, don't forget to consider the costs of real estate taxes (and recognize, these generally increase, every year).
3. Monthly carrying charges: Factor in, all the ingredients, related to your total, monthly carrying charges! This includes: mortgage - related costs (interest, principal, escrow), taxes, utilities, reserves for maintenance and repairs, etc.
4. Condition/ up - keep: Examine the overall condition of the prospective property. What might require immediate attention, and what might that cost? What do you anticipate annual maintenance, and ip - keep, to be? Remember, if there is nothing needed, you will probably pay more, to purchase it, so factor in your total costs!
5. Necessary repairs: What might be immediately needed, to fix, and/ or repair, in order to avoid major problems/ challenges, in the future? Distinguish between necessary and optional repairs, and create a realistic schedule and time - line, with the costs determined!
6. Needed renovations: When you look at investment property, use a different mind - set, than when you look at your personal residence. Always factor in the advantages, necessities, and costs of renovations, and consider multiple options, including advantages and disadvantages!
7. Potential Rent - Roll; Return on Investment (ROI) : Examine the current rent - roll, as well as the potential one, if you make certain renovations, etc. This Return on Investment, or, R.O.I., is essential for making wise decisions, with this type of real estate. However, avoid over - estimating your revenues, and estimate, conservatively! Shoot for a 6% return, which means, getting at least, a 6% Annual Return, on your investment, which includes, your original cost to purchase, and any renovations and repairs, anticipated, ทาวน์เฮ้าส์มือสอง ราคาถูก in the first two to three years. In addition, seek a Cash Flow - positive, scenario, where rents received, exceed monthly expenditures. Also, base revenues on only 10 months income, while counting all expenses, in order to be positioned, in case of vacancies, and/ or turn - overs!
8. How easy to rent: Consider the local area, and determine, whether it should be rather easy, to rent units, because of demand, desirability, etc!
Investment properties often make great investments, but, only, when done, wisely, carefully, and in a prepared manner. Follow these 8 steps, to be better prepared!
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