Before you embark on this type of real estate investment, you must clearly define the objectives you want to achieve. For this, you must take the time to think and mention your different goals in writing. Here are ten tips you should follow if you hope to maximize your investment:
Find a seller who wants to sell
Otherwise, you lose not only time but money as well. The goal is to have a profit as soon as you buy the real estate without waiting for the resale. If the purchase price is too high, you will have difficulty making money, even with exemplary management. The state of the market at the time of resale cannot be known in advance, so you have to put all the chances on your side from the start. Focusing on immediate profitability means you cannot take the risk of selling your property when you will not have the time to maintain it.
Choose your target
This will let you know what type of property to go to if you want to make an acquisition. Small areas, for example, are very popular with students. Location is also a parameter that you must consider because it is closely related to the target.
Multiple searches and make fewer proposals
It is advisable to visit several real estate properties before deciding on one to purchase. There are many ways to search for the ideal property in which you can invest. Here are some ways:
You have the opportunity to have a wealth of information related to a wide variety of real estate. For example, you can learn about the environment and the reputation of the city, etc. By using the internet, you will also know if there are nearby casinos or airports. If too much is available in the area, the situation may be complicated. Infrastructure quality is also of great importance, as is economic activity.
People and trends
You have to go on-site to talk to the locals to check the real estate you are targeting. In this way, you will more easily know what the corner will look like in a decade, for example.
The immediate environment
Above all, you must focus on businesses, schools, and even transportation. The environment is a factor in real estate’s attractiveness, especially if they are intended to be rented.
Buy near you
Set up a team that understands the workings of rental real estate investment
You will not succeed without being surrounded by a notary, an accountant, and a real estate agent. Having a craftsman on hand can also be a plus, and being surrounded by architects, insurers, etc. It all depends on your objectives, but surrounding yourself with such a team will allow you to be serious from the beginning. Some people decide to invest with a partner, but you must make sure:
- To be complementary
- To be able to discuss healthily about an idea
- To be able to work and to share you equally the benefits
- That you have the same expectations
- To have the same values
Forget the instinct
Regarding a rental investment, you must analyze things rationally. To put the odds on your side, you must make a list of the different criteria. Sometimes problems you notice will allow you to renegotiate the price of the good you want to buy.
Study the profitability
If the profitability is less than 6% net after the deduction of taxes, this investment can be discussed. Also, you have to consider two parameters: the potential rent and future rent. The first is the one you can get by making minor changes to give more weight to the rent.
As far as it is concerned, future rent is the one you can get based on progress and the environment. All this is, of course, framed by the various legal provisions. It would be best to consider maintenance costs as they will be higher in time. Remember that the older a property becomes, the more it needs to be maintained.
Finance not forgetting that you invest in rental real estate
Sometimes, it can take a longer or shorter time to find the necessary funding. You must know beforehand that you have the essential resources not to leave an opportunity. This is also true for borrowing capacity.
Do what you need and find out
You will need to have the real estate insured, so getting a lawyer on the legal side is essential. In short, it will matter to invest accordingly if you intend to secure the business in which you intend to invest. News can also be a good source of information.
Surround yourself with good managers
Management is a serious business that does not leave room for improvisation. Poor management can make your business flow in no time. Even if you initially planned to manage the property yourself, it is always advisable to provide in your finances a margin to entrust the work to a pro.About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.