When investing in real estate, there are certain things that set some properties apart from others that you’ll want to give careful consideration to. Here are four of them.
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Investing in real estate is a great way to build wealth. If you think this is in your future, here are four factors that you need to consider before making a final decision:
1. Projected income. The goal of any real estate investor is to amass a nice ROI over time. At the bare minimum, though, the rent you’re bringing in should cover mortgage costs. So what system for rent-setting should you follow? Follow the 1% rule, which will allow you to receive 1% of the purchase price back in rent payments on a month-to-month basis.
2. Current tenant situation. Being hasty with your decision to buy might result in you being stuck with unpleasant tenants. Ask questions to understand the full scope of the situation: Are the tenants at will? Are they under market? Do they pay? Unfortunately, some properties are marred by problems with hoarders or various other badly mismanaged situations, so know beforehand what you’re investing in.
“Unfortunately, some properties are marred by problems with hoarders or various other badly mismanaged situations, so know beforehand what you’re investing in.”
4. Utilities. For those investing in multi-unit properties, you’ll want to have a handle on how utilities such as water and electric are organized: It could be that they’re separate for each unit or one source services the whole building. Knowing this will help you establish what costs you’ll incur each month.
If you have any real estate-related questions or there’s a topic you’d like for me to discuss in my next video, please give me a call or send me an email. I look forward to assisting you!
