In today’s real estate market there are deals available for those who are ready to invest.In fact, today a buyer can buy real estate and have a better cash flow than in years past. A few years ago an investor would be happy with buying an investment property that could cash flow $200.00 a month over the mortgage payment. That was figured on a 20-year mortgage including taxes and insurance. Today you can buy rentals that will cash flow up to $400.00-$500.00 or more per month.
TODAY’S OPPORTUNITIES ARE BETTER THAN EVER.
Plan your future with rental houses in it. Buying investment property today comes with low interest rates, resulting in lower payments. PLUS, due to the high demand for housing across the country and in DFW, rent prices continue to rise.
Once you buy an investment property, follow the model of successful investors and hire a professional management company to handle the day-to-day minutia. Spend your time locating those real buys and let a property management company do the management.
Be sure to look at homes that need work. Mortgage companies are not generally interested in spending more funds repairing them, resulting in you getting a lower price. All sounds real simple, right? It doesn’t have to be complicated, following a few simple steps will help you get started. The following tips will keep you on track as you grow into a real estate mogul with successful investing!
5 TIPS FOR SUCCESSFUL REAL ESTATE INVESTING
Make a plan – Determine how many houses you want to purchase per quarter, per year, and know how much cash-flow you want each property to produce for you over and above mortgage, insurance and expenses. Other items to plan for are:
- What areas do you want to target? Look for properties that meet your criteria in the areas that you choose.
- Look for a win/win in every purchase; it needs to work for you, the bank and the owner.
- Don’t get emotional, learn to negotiate – this a business purchase.
- Remember that ugly ducklings can be made beautiful. Look for properties you can fix up to increase the value of the neighborhood – which in turn increases your investment.
- Know your objectives – Write out your objectives for investing.
Do you want to –
> build future wealth on investments that will cash-flow itself while building a retirement income on a 20-year note,
> build short-term wealth that provides a monthly income from the cash-flow on a 30-year note,
> or, get immediate cash by buying low and flipping (fixing up and selling for a profit)?
Set your Parameters – Determine the parameters in advance, i.e. what type of house will you buy? What type of lease will you take? What can you afford to buy?
> Go for the lower maintenance, more popular styled home for your area: i.e. 3 bedroom, 2 bath, 2-car garage, central heat and air, with brick exterior. Remember, the better quality home the better quality tenant/lease you will be able to secure. Stay away from homes that require continuous maintenance and upkeep (i.e. homes with wood siding).
> Go with a minimum 2-year lease. A tenant who signs a 2-year lease will most likely sign for another 2 years, and another 2 years – you are already 6 years, into paying off your investment!
> Know how much money you can invest in a property without breaking YOUR bank! Look for REO’s and houses that have been on the market for a very long time (180 days +).
> Get your $$$$$ in order – Of course you will have to get your credit in order and have a good relationship with your lender.
Here are a few “secrets” from the experts to continue your success:
- Have a 6 month “emergency” fund put back to protect you and your investments.
- Save money to take care of your future. No one else can do this for you.
- Pay attention to your business, your assets, what you are spending and what you are saving.
- Learn to GIVE. It will come back to you.
Use a property management company – One of the biggest mistakes and “time guzzlers” is in trying to manage your investment properties yourself. Experts advise you NOT to manage your properties yourself…”don’t worry about the $45 and $50 items that need to be fixed at your property, instead focus on the $40,000 equities that are out there!”
A property management company will take care of these things for you, freeing your time and resources to develop your investment portfolio:
- advertising your vacant property
- thoroughly screening a prospective tenant
- performing move-in, move-out and periodic inspections d. expediting emergency repairs
- handling regular maintenance and upkeep of your property
- overseeing any legal or collection issues
Real estate investing is a proven way to build wealth, and anyone can start! Use these simple tips to get started then contact Norma Langston to help you with your first purchase.