It can be a very stimulating moment when you obtain your first Elkins single-family rental property. And yet, there are risks to be considered — natural, of course, for every investment. In Elkins, your first investment property purchase must be as profitable as can be. Let’s see what we can do to do just that. By following these vital insights, your first rental real estate purchase will be a worthy reward for investment.
Clearly defined end goals are what you need to have before you purchase your first single-family rental home. Contemplate on the multiple qualities to consider in an investment property, even before you go on a property search. Some of these might be properties in a certain area, with a specific number of bedrooms, or minimum square footage. By knowing the specifics, you can refine your search criteria and locate potential properties faster.
It is important to be financially prepared to purchase an investment property, especially when you’ve already examined which qualities you want for yourself. If you have any personal debts, it’s best practice to pay them off, so that you can start saving up for a down payment. Consider settling these two before you make any property search, as is the counsel of industry experts. The reason being is that a reduced personal debt will allow you to qualify for more favorable loan rates. After all, mortgage loans for an investment property will require a 20% down payment. Be wary, though, of high-interest loans or mortgage products that seem a little too good to be true. By prequalifying with a reputable mortgage lender, you will be ready to seize the investment opportunities as they arrive. By making financial readiness a priority, you can more confidently buy that rental property when the time comes.
Before you begin your search for the right property, make sure you examine and pay attention to these important preliminary steps. Essential to your search for the right property is for you to run a series of numbers on each prospective property, including your margins, operating expenses, and expected return. This is a serious mistake that many new investors make.
New investors sometimes forget to include all of the expenses related to purchasing and preparing the rental property for lease, as well as any ongoing property management, maintenance, and vacancy costs. Industry experts suggest a margin goal of 10% and a 6% return in your first year means that you have a profitable investment.
Lastly, you mustn’t forget that an investment property is just that, an investment. Getting attached to a particular property or allowing emotions to guide your decisions is not a good idea. Also, the property you buy is not necessarily a property that you would ever live in yourself. For your first investment, industry experts recommend opting for low-cost properties in high-demand areas. Steer clear from fixer-uppers unless your knowledge of home remodeling is sufficient, or if you can call on a quality contractor who will do the work for less than the going rate. Make it your intention to pursue a long and profitable investment career. You can do this through the purchasing of your first single-family rental property. In so doing, you are safeguarding yourself and keeping your investment properties debt-free.
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