Investment properties are good for your business, but there are a few things you need to know about a property before buying it.
If you don’t already own an investment property, it should be your goal to buy one by the end of this year. Before you buy a property you’re interested in, though, there are a few things you need to consider.
First, what is the projected income of that property? What are its income rates now, and where will they be in the near future? Look at the rent rates and see if there’s an opportunity to raise them. Remember, the higher the income, the higher the value of the property. If the current landlord has owned that property for at least the past three years, the rent is properly low.
Second, what is the current tenant’s situation? Get a copy of the property’s leases and see if anything needs to be adjusted so you can better understand what you’re getting into.
Next, consider the utility situation. If you’re buying a multi-unit property, there will be separate utilities, which means there will be a difference in income.
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When you invest in real estate, you can offer more value to your clients.
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Also, consider the overall condition of the property. You already know that you need to order an inspection for it, but in some cases, you’ll need to bring in additional experts so you can better understand what needs to be done to fix it up and whether you have the funds in place to make the necessary improvements.
Lastly, try to have six months’ worth of cash reserves so you can make those improvements. Make sure you have that money in the bank so you can take care of roof expenses, plumbing expenses, etc.
When you invest in real estate, you can offer more value to your clients. You understand rent laws, what it takes to buy and sell a rental property, and what it’s like being a landlord. Also, you can reap the benefits of owning that property’s income forever.
If you have any more questions about the benefits of investing in real estate or there’s anything else I can help you with, don’t hesitate to reach out to me. I’d love to speak to you.
