Hi! This was written by Katie Conroy. Thought you might find it interesting.
"If the stock market scares you, the real estate market might be your best bet to establish long-term wealth. Although real estate is not fully recession-proof, there will always be a demand for rental properties, both long and short-term. Read on for a few tips on how to make the most of your first investment property buying experience.
Use an experienced realtor.
Using a real estate agent is crucial, whether you’re buying your first home or your 50th. An experienced agent, such as Kyla Brooke, can help you take the pulse of the local real estate climate. More than just helping you find the right price, she can look at your potential properties objectively and help you do the math on whether your investment is likely to render a return.
Safeguard your personal assets.
As a landlord, you can operate as a sole proprietor or as an LLC. An LLC has numerous benefits in this case, especially if you own the home that you currently live in. According to ZenBusiness, forming an LLC is a fairly quick and simple process that you can do using an online formation service without the expense of an attorney. In addition to legitimizing your business, an LLC can protect your personal assets from litigation.
Know the biggest draw to the area.
Before you start investing in real estate in a specific location, you should understand why this location makes sense. For short-term rentals, such as a vacation property, it’s likely local attractions. A home near the beach or mountains may be more likely to turn a profit than a property in the middle of nowhere. As a long-term rental, your tenants may have had a need to relocate, including for affordability or employment opportunities. In this situation, a mid-priced home in an area with lots of jobs is a good bet.
Research your financing options.
In general, financing an investment is more expensive than buying a home for your family. While your mortgage banker is the best person for advice in this arena, you can make the process go more smoothly by making sure you have a reasonable down payment – at least 20 percent – and raising your credit score to 700 or higher.
Brush up on your handyman skills.
When you own a property, home maintenance can get expensive very quickly. Plan to brush up on your handyman skills if you live less than an hour from the property. Travelers Insurance suggests that landlords require tenants to contact you if there are issues with water leaks, the HVAC system, the garbage disposal, or the electrical system. Learn some basic skills here, along with drywall repair and smoke detector replacement, so that you don’t have to pay a service call each time a small problem arises. Do keep in mind, however, that your home’s major systems require a licensed repair professional. While you can swap out the filter of your HVAC or change a floodlight, anything more in-depth is not a DIY endeavor.
Decide on how to manage the home.
Whether you’ve chosen a vacation property or a single or multi-family property, you’ll also want to decide how to manage it. Collecting rent, selecting tenants, and filing eviction notices may be done on your own or, if you are just learning the business, outsourced to a property management agency for a fee, typically 8 to 10 percent of the monthly rental charge.
Buying your first investment property is exciting. Not only does it give you a chance to earn an income, but you can also have your retirement nest egg paid for by someone else while you continue to work. But don’t go into it blindly; use a realtor and do your research first."
Written by Katie Conroy <[email protected]>
Please contact me for buying or selling real estate.
Your House Matters!
KYLA