First Time Real Estate Investment Strategy

     More and more people are living in rental properties today now than ever. This means investing in one can be extremely lucrative. As with any real estate investment, a rental investment has risk. It also requires tedious research, but the risk and rewards can pay off. You need to take into account the considerations before taking the step out on that branch. If you have no prior experience, you need to ask yourself a few key questions.

Money Matters- first look at your financial situation. What kind of down payment can you make, and how much of a monthly mortgage payment can you afford? How much will you need to make in monthly income in order to keep up with the monthly payments? Do you have enough of an emergency fund to handle vacancies in a down period?

     It's not a bad idea to get pre-approved for an investment property loan, and then secure the service of a real estate agent to help you find the type of property you desire.

Location Matters- You obviously don't want to invest in an area where no one wants to live, so find a place where people do want to live. Consider the proximity to transportation, schools, and shopping, as well as the areas crime rate. These are the same considerations you would look at if you were buying a home for yourself. Next decide what kind of property you want to invest in and what interests you. Are you wanting a single, or multi-person dwelling property. Condos? An apartment complex? A vacation destination?

     Once you've decided upon the property type, you will need to look at whether or not you have the financials (and time) to handle a fixer upper. If not, be ready to buy a place that has minimal necessary up-front fixers. You will also need to think about how much rent to charge based on the area and amenities the property offers.

Management Matters- Are you ready to manage the place, or should you hire a property manager? If you do not live near the property, then a property manager is probably the best route to take. Find the services of a property manager who can take care of the daily duties and secure their position. It is also important that you have a qualified inspection of a property to check for any hidden problems with plumbing, electrical, foundation, that could come back to haunt you in the long run.

     When you calculate your monthly expenses you will need to include maintenance as well as vacancies that don't produce any income. Also consider any other problems like tenants that are late with rent, or do not pay at all.

?Marketing Matters- How do you plan on attracting tenants and keeping them there to eliminate the vacancies? You will need to understand the rental market in that area so you can determine the vacancy rate and marketing efforts. Have a screening with tenants who will likely have trouble paying rent and weed them out.

     Once you've taken all these things into consideration, it's time to find the right property and make your offer. This is where the help of a real estate agents come into play. If you have no prior experience it is best to start small. If you succeed and make some decent cash flow, always consider broadening your investment to bigger complexes.

Do your homework and learn that investing in rental properties can be a lucrative investment.

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