If you’re looking to buy your first investment property, follow these three tips.
There are three things you need to keep in mind when buying your first rental property:
1. Work with a great team. Find a team that is experienced with purchasing rental homes and property. Ask them how many they’ve bought in order to find out how skilled they are. You’ll find that many Realtors haven’t actually dealt with rentals. Your agent should either invest in real estate themselves or know the rental market inside and out.
There are four ways you can make money in real estate: cash flow, appreciation, depreciation (tax benefits), and mortgage payment.
2. Make your current home a rental. This is one of the best ways to move toward creating investment property. You won’t have to sell the home and you’ll already have a low interest rate since it’s your residence. This way, you can buy your second home and keep your first as a rental.
3. Understand how you make money in real estate. There are four ways you can make money: cash flow, appreciation, depreciation (tax benefits), and mortgage payment. You should be careful, though, if you only consider one factor. If you buy a beat-up property in order to get a higher cash flow, you could find out the home never appreciates in price.
A lot of people make some big mistakes when they invest, so if you’d like to learn more about how to make a successful investment, reach out to me. I look forward to hearing from you soon.