How to easily become a #realestateinvestor.
First, it is imperative that you have good credit. Having good credit will give you access to loans with the best interest rates. The best way to avoid the high down payment required of investors is to live in the house for at least one year. If you qualify for a $300,000 home, for instance, look at homes that are priced at $50,000 - $150,000 range. Keep in mind that you will need to qualify for a second home loan after a year, when you move out.
After a year, start looking for another property with a mortgage that you can afford. Once you find a second home, you will rent out the first home. I strongly suggest that you use a property manager to handle background checks, credit checks and safety of the rental property.
If you’re having a difficult time coming up with money for a down payment for the second home, consider using equity from the first home if it’s feasible. I recommend that you not touch the equity in your home unless it's absolutely necessary. Once your home has been rented for a year, you can begin claiming the rental income on your taxes which will help you qualify for loans.
Most real estate investors have a regular full time job and do real estate on the side. Others with a lot of cash may be full time real estate investors and use a different method. My point is that anyone can become a real estate investor if they plan properly and research homes/neighborhoods which have higher rent amounts.
Real Estate is by far the best investment that you can make. Be sure that you are purchasing homes in neighborhoods that are highly sought after. Consider school districts, proximity to major high ways, shopping and hospitals. If you purchase a home in a very remote area you might find it difficult to rent.
Your property manager will collect rents each month. They will retain 10% of the rent as their monthly commission, then they will deposit the remainder of rent into your personal account.
Be sure to have money set aside for incidentals like repairs. As a landlord (investor) you are responsible for making sure that the property is safe and that it meets the standards for rentals properties. As an investor/Landlord, your responsibility is greater, when you are renting out to the public.
Stay out of court by learning your responsibilities as a landlord. The property manager is imperative and is responsible for protecting your investment so let them worry about the day to day business. When something brakes, the tenant will call the property manager and the property manager will keep you informed of what is going on. Having a property management company will keep you out of court.
My husband and I own our primary residents plus two rental properties that generate residual income for our family and we let our property manager do the real work. We don't even know the tenants. All we have is a copy of the signed lease. A good property manager will do an inspection every six months or so. They’ll visit the property, take pictures and send them to you to show you that your property is in good standing and being taken care of. It may seem like a lot, but it’s not once you get in the rhythm of real estate investing.
So again here is how to get started:
1. Qualify for loan (keep in mind that you’ll be purchasing a second or third home down the road). So if you qualify for $300,000 loan. Purchase a home in the $50,000 - $150,000 range. Live in the house for a year.
2. After a year, start looking for a second home in the $50,000 -$150,000 range. You should have no problem qualifying for a second home mortgage, as long as you’ve made payments on time for the first property.
3. Once you identify a second home you can afford, make and offer.
4. Move out of the first home and into the second home.
5. Hire a property manager to take rental applications for tenants for the first property.
6. Live in the second home for a year, then repeat the process. By this time, you should have your first property rented for a year and can use the rental income to qualify for future loans.
Unless you're actually flipping homes or have a lot of cash, I suggest that you hold onto properties and let them build equity. Currently, my husband and I have nearly $300,000 in equity for two rental properties plus our primary residence. They key is to buy low and sell high. Our primary residence is projected to be worth $500,000 by the year 2020 so again, hang onto the home and keep it in good condition.
Invest in single family homes, apartments and condos. Just be sure to do your due diligence while going through the process.
Good luck with your real estate investments. It's very empowering.
First, it is imperative that you have good credit. Having good credit will give you access to loans with the best interest rates. The best way to avoid the high down payment required of investors is to live in the house for at least one year. If you qualify for a $300,000 home, for instance, look at homes that are priced at $50,000 - $150,000 range. Keep in mind that you will need to qualify for a second home loan after a year, when you move out.
After a year, start looking for another property with a mortgage that you can afford. Once you find a second home, you will rent out the first home. I strongly suggest that you use a property manager to handle background checks, credit checks and safety of the rental property.
If you’re having a difficult time coming up with money for a down payment for the second home, consider using equity from the first home if it’s feasible. I recommend that you not touch the equity in your home unless it's absolutely necessary. Once your home has been rented for a year, you can begin claiming the rental income on your taxes which will help you qualify for loans.
Most real estate investors have a regular full time job and do real estate on the side. Others with a lot of cash may be full time real estate investors and use a different method. My point is that anyone can become a real estate investor if they plan properly and research homes/neighborhoods which have higher rent amounts.
Real Estate is by far the best investment that you can make. Be sure that you are purchasing homes in neighborhoods that are highly sought after. Consider school districts, proximity to major high ways, shopping and hospitals. If you purchase a home in a very remote area you might find it difficult to rent.
Your property manager will collect rents each month. They will retain 10% of the rent as their monthly commission, then they will deposit the remainder of rent into your personal account.
Be sure to have money set aside for incidentals like repairs. As a landlord (investor) you are responsible for making sure that the property is safe and that it meets the standards for rentals properties. As an investor/Landlord, your responsibility is greater, when you are renting out to the public.
Stay out of court by learning your responsibilities as a landlord. The property manager is imperative and is responsible for protecting your investment so let them worry about the day to day business. When something brakes, the tenant will call the property manager and the property manager will keep you informed of what is going on. Having a property management company will keep you out of court.
My husband and I own our primary residents plus two rental properties that generate residual income for our family and we let our property manager do the real work. We don't even know the tenants. All we have is a copy of the signed lease. A good property manager will do an inspection every six months or so. They’ll visit the property, take pictures and send them to you to show you that your property is in good standing and being taken care of. It may seem like a lot, but it’s not once you get in the rhythm of real estate investing.
So again here is how to get started:
1. Qualify for loan (keep in mind that you’ll be purchasing a second or third home down the road). So if you qualify for $300,000 loan. Purchase a home in the $50,000 - $150,000 range. Live in the house for a year.
2. After a year, start looking for a second home in the $50,000 -$150,000 range. You should have no problem qualifying for a second home mortgage, as long as you’ve made payments on time for the first property.
3. Once you identify a second home you can afford, make and offer.
4. Move out of the first home and into the second home.
5. Hire a property manager to take rental applications for tenants for the first property.
6. Live in the second home for a year, then repeat the process. By this time, you should have your first property rented for a year and can use the rental income to qualify for future loans.
Unless you're actually flipping homes or have a lot of cash, I suggest that you hold onto properties and let them build equity. Currently, my husband and I have nearly $300,000 in equity for two rental properties plus our primary residence. They key is to buy low and sell high. Our primary residence is projected to be worth $500,000 by the year 2020 so again, hang onto the home and keep it in good condition.
Invest in single family homes, apartments and condos. Just be sure to do your due diligence while going through the process.
Good luck with your real estate investments. It's very empowering.
