Here Tim Marais has discussed the tips to investing in real estate and its steps provide you with a steady stream of income that becomes almost all profit after the property are paid for.
2. INTRODUCTION
Investing in rental real estate can
provide you with a steady stream of
income that becomes almost all
profit after the property is paid for.
However, getting to that point is
risky and requires much more work
than it seems like it does. Investing
in real estate will require you to
choose a great property and then
maintain than property, and deal
with its tenants, indefinitely or until
you are making enough to hire a
manager.
3.
4. HOW TO INVEST IN RENTAL REAL ESTATE
Assess your ability to manage the property
Seek a buy to let mortgage
Make sure you have needed financial reserves
Invest for the long term
Find an ideal rental market
Invest in commercial properties
Evaluate return potential
Make sure you're getting a deal
Obtain insurance
Market your rental property
Make sure to collect rent
Hire a property manager
5. ASSESS YOUR ABILITY TO MANAGE THE PROPERTY
Being a landlord is not passive income or a part-time job. You will have
many responsibilities when it comes to managing the property. This
includes selecting and communicating with tenants, repairing the
property when necessary, and dealing with a large variety of day-to-day
issues. Make sure that you aren't already juggling too much with work
and family before deciding to become a landlord.
6. SEEK A BUY TO LET MORTGAGE
In order to rent out a property, you'll obviously have to purchase it first.
This will be done with a buy to let mortgage, which is assessed
differently than an owner occupied mortgage. The bank will consider
the potential rental income and expenses of the property versus the
owner's ability to pay for it. Use a mortgage calculator online to
determine how much you can afford to spend on a rental property.
7. MAKE SURE YOU HAVE NEEDED FINANCIAL
RESERVES
Owning a rental property can have unexpected problems. Your
tenant can lose their job and not be able to pay the rent. You have to
have enough money in the bank to get you through months without
any money coming in. There are owners who are dependent on the
rent to pay their mortgage.
8. INVEST FOR THE LONG TERM
Never buy real estate as an investment unless you have a 10 to 15 year
horizon. Housing bubbles seem to come every 10 to 15 years and
everyone wants a piece of the action. The great majority of people never
get the chance to get out in time and get financially hurt. The wise
investor is not swayed by greed and quick returns.
9. EVALUATE RETURN POTENTIAL
Your main focus should be on your
potential return on the property,
which is the rent you receive minus
any expenses. This will depend on
the prevailing rent in the area and
the specific qualities of the home
that might allow you to charge more
or less rent. Ask the current owner of
the property for financial information
regarding the property, particularly if
they have been renting it out.
10. MARKET YOUR RENTAL PROPERTY
Start by listing your property on websites like Craigslist, Trulia, and
Zillow. Make sure to include plenty of high-quality and well-lit pictures.
Fill out the listing will as much information as you can. You can also
purchase an advertisement in the newspaper, though this is expensive
and may be ineffective.
11. HIRE A PROPERTY MANAGER
A property manager or property
management company can relieve
the burden of your landlord duties.
They collect rent, take care of
maintenance, and find new tenants
when needed, among other duties.
However, hiring a property
manager will generally cost you 5
to 10 percent of your rent revenue.
12.
13. WHO I AM…
Tim Marais is a successful real estate investor real estate
transaction, buying and residential homes and helps various
buyers and sellers to face the challenges occurs in the real
estate market.