It's a better time than ever to start real estate investing. Are you ready to become an investor and secure your financial future?
Becoming a real estate investor might seem easy, but there's more to it than you'd think. We're here with a brief guide for real estate investing for beginners so you can start off on the right track.
Read on to learn our top real estate investing tips.
Decide What Type of Property You Want to Invest In
If you want to invest in real estate, you have several options when it comes to what type of property you're going to invest in.
You could invest in commercial property. This means that you'll rent out your property to business owners.
Most people choose to invest in residential properties. The rental market is hot right now, and it's a relatively safe investment. Then you have to decide if you want to invest in a single-family or multi-family property.
Single-family properties are complete homes while multi-family properties are duplexes and apartments. There are pros and cons to both of these options, so decide carefully.
At this point, you should also be researching good neighborhoods to invest in.
Save for Your Down Payment
You're going to want to save up for a 20% down payment (if not higher) if you want to give yourself a good headstart. Remember that you're likely going to be paying a high interest rate on this property because it's an investment property instead of a primary residence.
Alongside your down payment, make sure that you have enough money for at least three months of mortgage payments in advance.
If this means that you have to start with a more affordable rental property, that's okay. Any investment is a good start.
Factor In Other Costs
You also need to remember all of the other costs associated with being a real estate investor.
If you buy a fixer-upper (which we don't recommend for your first property), you'll need to pay for extensive repairs. Even "good" properties need minimal repairs and routine maintenance if you want to keep them in good condition.
You're going to want to set aside about 30% of your rental income to protect yourself from potential emergencies, like burst pipes or natural disasters.
Keeping extra costs in mind will also help you set your rent.
Hire a Property Manager
Being a landlord isn't a hands-off investment. A lot of work goes into keeping a property in good condition and keeping tenants happy. If you also have a "day job," it can get overwhelming.
Hiring a property management company right from the start will help. A good property manager knows all about landlord-tenant laws, how to write effective leases, tenant screening, marketing, and more.
They'll help you fill vacancies as soon as you buy your property so you can start paying off your mortgage and making rental income right away.
Get Started Real Estate Investing Today
Real estate investing is a great idea for anyone who has the disposable income to buy a property. It's a safe investment and it can be relatively passive if you hire a property manager to help you out. Keep these real estate investing tips in mind when you search for your new rental property.
If you're investing in real estate in Sumter, SC, we want to meet you! Contact us so we can start working together today.
