Have you ever wanted to invest in real estate? It can be an amazing investment opportunity, but you need to consider these six things before making the leap.
It’s still a great market for buying property here in the Dayton area, and that’s especially true for investment property. Have you thought about adding real estate to your portfolio? If so, you need to know these six important things before buying one:
1. Your personal finances need to be in order first. Can you handle this commitment? You should have a steady income and a well-stocked emergency fund and your non-productive, high-interest debt paid off, and be on track for your retirement goals. Like with stocks, you want to map out the investment carefully because not every real estate deal will make sense for your portfolio.
2. Calculate your return on investment before buying: You wouldn’t put money in a mutual fund without checking its performance. Rental property isn’t a low-risk investment, so it’s important to consider the ROI as it compares to the risk you’ll incur.
3. Find the right agent: Since many agents only view you as a potential commission, it’s critical to find an agent who’s on your side and has experience. They should be interested in establishing a mutually beneficial relationship and have investment property of their own.
“You wouldn’t put money in a mutual fund without checking its performance first.“
4. Realize that your investment property doesn’t have to be your dream home: I can say from personal experience that your wants and must-haves in a home generally aren’t what your investments are looking for. Regardless of your decision of ROI, you want to find the best properties available in the location you can afford and where your returns fit best.
5. Find a good and trustworthy accountant: As a real estate investor, your life will change in terms of bookkeeping and accounting. A great tax advisor can unearth all the benefits and write-offs you get as a property owner.
6. Keeping tenants requires some TLC: Finding good tenants who pay their rent on time is just as important to finding a good investment property. It’s important to screen every potential tenant with background checks, credits checks, and previous landlord checks. Once you find a good tenant, hold on to them!
If you’re interested in buying investment property or just learning more, give me a call or send me an email soon. I’d love to help you out.