|
Author: Elaine VonCannon Article source: http://www.voncannonrealestate.com/. Used with author's permission.
Investing to rent can create the financial and real estate success you have been searching for, but it takes hard work, thoughtful preparation and practical knowledge. As a landlord you must be creative, fearless and intuitive. In the Tidewater area approximately one out of every five homebuyers is making an investment as well, whether it's in a second home, rental unit or a condominium for a child attending college.
In all of these circumstances you must look realistically into the future about finances, home maintenance and upkeep.
Choose Your Location Carefully
The first consideration when buying real estate for rental property is what area or region will work best. Research the area of your choice thoroughly. Check the local papers and learn about the types of rentals advertised and the average monthly rents. Talk to several real estate professionals, including property managers, and find out the average length of time a rental unit stays on the market before tenants move in. These professionals will also have insight into which locations are more desirable and what types of rentals are the hottest.
For many first time investors a smaller property is the best way to begin and it is very beneficial to hire a trustworthy and competent property manager. Read my article Property Management: The Good The Bad And The Ugly at www.voncannonrealestate.com to learn more. Once you are a seasoned landlord you can expand your vision to include larger properties. If you are buying a condominium or townhouse be certain to review the Home Owner's Association (HOA) rules in regards to rentals with your real estate agent. The HOA often has limitations on the percentage of homes that can be used as investment rentals.
Mortgages and Rents
Once you have researched and chosen the perfect area think clearly and carefully about the type of mortgage you are qualified for. In order to purchase real estate with the intention of renting you must be certain the rents you charge cover the mortgage. Know the current rental trends and think of how your rental property will hold up in comparison. If a property's rent is advertised above the average the property may not rent and become stale. Once stale, potential renters often have the impression something is wrong with the property.
Remember, if you purchase a property that was a rental in the past and put 5 to 10 percent down the mortgage may be too high. Investing more money, as a down payment, will lower the mortgage. As a landlord you want to have a positive cash flow, it is essential to make some profit each month, even if the profit fluctuates. Ask the current owner to review the rental history of the real estate with you. When you purchase property with more than one rental unit the mortgage you qualify for is based on the rent of the previous three years. As a buyer and new landlord the rent you charge is based on the current leases you inherit. These leases remain in affect until their renewal date.
Investing In The Future
Always buy rental investment property with the idea of re-selling in mind. When you invest in rental property you need approximately three or four months mortgage payments in reserve to cover repairs and to procure new tenants if necessary. Plan for the cost of advertising and the time of showing the rental if you are not using a property manager or real estate agent. Think realistically how much work, money and time you must invest. Always fix smaller problems, as they occur, to avoid more expensive repairs in the future.
Renovations and upgrades can also increase the return on your investment. To learn more about the types of renovations and upgrades that can increase your profitability visit www.vonannonrealestate.com and read my article Renovations and Upgrades: Bring It To The Bank. Maintenance of rental properties is incredibly important. If the property is distressed, later you will not sell for top dollar and get the highest return from your real estate investment. Real estate investment requires trusted, professional real estate advisors and planning for the future. These tools help you reach your investment goals and you can bring your real estate investment success to the bank! Elaine VonCannon is a REALTOR with RE/Max Capital in Williamsburg, Virginia, and she manages investment property. Elaine is also an Accredited Buyer's Representative as well as a Senior Real Estate Specialist. She has helped numerous clients invest in and make money on property in Southeastern Virginia. For more information about Virginia real estate or to read more of my educational articles please visit http://www.voncannonrealestate.com
Scientific Research Shows Why Diets Dont Work, If You Want to Sustain Long Term Weight Loss
We all know diets don't work, but we continue to try the next diet fad to come our way. Scientific research now shows you why diets don't work and what you can ...
Testing And Tracking Your Business
The purpose of testing is to increase the response rate to your ad or offer. For instance, you could write a sales letter and test out different headlines for t...
Understanding Nutrition
What do you really know about nutrition? Could you explain it to another person? Perhaps the reason there is so much confusion surrouning the topic is because o...
Types of Listings with Agents
There are different types of listing contracts with agents, it's better to know about them before concluding with any one type. Read on for more information...
NotOneOunce -- Junk at the Office
After the post-Halloween sugar surge, everyone coaches you to get the candy out of your house. This is terrific, but many people solve the problem by taking it ...
You Can Develop An E-zine Even If You Dont Enjoy Writing!
OK. Who told you that the only way to create an ezine was to write your own articles or tips any way? That is just not true.
What is Pilates?
You may be asking what is Pilates? Pilates is a system of over 500 exercises. The Pilates system engages the mind and the body for a true fitness work out. T...
Motivation - The Key to Your Childs Educational Success
A child's mind is the most impressionable in the first few years of life. As a parent, we have the opportunity to foster a love for learning. Here are a few tip...
Your Guide On Choosing a Credit Card To Suit You
Reach into your wallet or purse, pull out a card, swipe, and you're done. It is very easy to use a credit card. The problem lies in choosing a card - and it has...
Advice on Choosing Your Self Catering Accommodation Unit
An article giving holiday makers advice on choosing their self catering accommodation units.
Self-Employment: Do you know the Difference between Rates and Wages
The difference between rates and wages is not always clear to newly self-employed people and their wage-earning clients. Most newly self-employed workers are f...
How To Get The Most Out Of Your Trekking Poles
How to get the most out of your trekking poles is one of the biggest concerns while considering buying a new pair or using your existing trekking poles. To get ...
Difficult Challenges? -- What If?
Sometimes life can seem like one long series of unsolvable problems. I know there have been times when I would much rather find something else to do and quit wh...
Garbage Words In - Garbage Thinking Out
Just imagine what we could do if we understood a tenth of what our brains are capable of. Now, I certainly don't presume to offer an owner's manual, but I can o...
Boosting Your Sexual Confidence!
Birds do it, Bee's do it... let's face it we all do it! Enjoying and participating in sex is one of the sweetest gifts we as human beings have at our disposal. ...
The Likeability Factor – Do You Have It?
Growing up, we all had a mental picture of the perfect life partner The person we thought would be our happily-ever-after -- a person with a perfect smile, beau...
Website Promotion – The Power of Writing Articles
Writing articles is the best-kept secret in the world of Website promotion. It is easy, yields fast results, and generates thousands of links to your website.....
How Your Unique Selling Proposition (USP) Can Make You Huge Profits
Why a "USP" will make you mega profits with your current online business!
Business Continuity Testing
This paper describes different types of business continuity testing and the relative strengths and weaknesses. It also shows how they must be aligned to the bus...
Why You Need A Virtual Assistant
Are you overwhelmed running your business? Are there not enough hours in the day? The more your business grows, the more administrative tasks you have; the more...
Managers, Got a Grip on Your PR?
What are you trying to do with your business, non-profit or association public relations program? Get a little publicity for a service or product? Or, perhaps, ...
Mixed Media Collage - Make The Pieces of Your Life Sing!
Feel like something is missing in your life? Trying to put the pieces of your life together? Then you'll find that mixed media collage is the perfect way to ga...
Staying Safe In A High Risk Market
Did you know that 80% of the price movement in a stock or a mutual fund is determined by the overall market conditions and by the company's sector? This is the ...
Job Search Advice for Desperate Job Seekers
Another morning of job hunting lies ahead of you. You pour a cup
of coffee and open the paper to the employment section. With a
mixture of anticipation and desp...
|
Print this page