Investing in real estate is a great way to build wealth. Here are four tips to help get you started.
These are the four things that you absolutely must look for if you’re in the market to buy an investment property:
1. Projected income. If you’re getting into real estate investing, you’re probably hoping for a nice ROI, but you want to at least cover that monthly mortgage at a bare minimum. Charge rent based on the 1% rule. If you’re buying a property for $200,000, for example, you should aim to rent it out for $2,000 a month. In some parts of the country where property is less expensive, you may want to bump it up to the 2% rule.
2. Current tenant situation. You don’t want to buy a home on a whim and then get stuck in a nightmare situation. If there are tenants in the property, are they tenants at will? Do they pay? Get some clarity around these issues.
3. Overall condition. It’s impossible to find the perfect property, so be aware of what needs fixing in a home and whether you’re prepared to shell out the time and money to get it done.
4. Utilities. If you’re looking at a multi-family property like an apartment building or duplex, you’ll want to know if the utilities are separate for each unit or all lumped into one. You’re more in the clear if the systems are separate. If they’re not, you’ll have to pay to separate them or foot the bill every month for the entire building.
Investing in real estate can be done locally here in Baltimore or in an outside market. Seth and I have several investment properties outside of Baltimore in an entirely different state, and we’d be delighted to talk about the opportunities that exist in the area to build your wealth.
If you have any questions about investing in real estate, or anything else, don’t hesitate to give me a call or send me an email. I look forward to hearing from you soon.