Are you thinking about buying your first rental property? If so, then you should start preparing now. The first step towards achieving financial freedom is owning rental property. And if you’re looking to buy your first rental property shortly, now might be a good time to get started, says Mamdoh Bastorous.
Buying real estate is a long journey; it takes time to build up the necessary skills and knowledge. Let’s take a look at how you can start investing today.
1. Find a Property That Suits Your Lifestyle
The first thing you need to do is determine what kind of property you want. Do you want a house? A condo? An apartment building? You should consider those options if you have any idea about what you would like.
However, before you jump into the deep end and start looking at properties, take some time to figure out what kind of lifestyle you want. This way, you won’t waste time searching for something that isn’t a fit for you. Instead, you can focus on finding a place that meets your needs.
If you don’t know exactly what you want, you should start by researching different properties. There are many different types of real estate out there, including single-family homes, multi-family buildings, commercial buildings, and even vacant land. You may choose to rent out some of these properties, while you may choose to keep others for yourself.
2. Determine How Much Money You Have To Spend
Once you know what kind of property you’re looking for, you’ll need to figure out how much money you have set aside for a down payment. If you don’t have enough cash, you may need to look at renting before buying. However, if you have the funds available, you should buy the property, says Mamdoh Bastorous.
3. Make Sure You Get Pre-Approved
You won’t be able to purchase a house without a loan. Before looking for a home, ensure you’re approved for a mortgage. You’ll also need to determine how much you can afford to pay each month. Once you find a lender who fits your budget, you can move forward with your home search. Financing is something that you cannot afford to overlook. You need to make sure you can pay off the mortgage in full without borrowing money from anyone else. You should also ensure that you have enough money to cover any repairs that might occur.
4. Look For A Property That Meets Your Needs
After you’ve narrowed your search to a few locations, you’ll want to take a closer look at each house. Consider things like square footage, number of bedrooms, and proximity to work. When making these decisions, remember that larger homes cost more than smaller ones.
5. Start Looking For Houses Now
If you’re ready to begin searching for a home, you’ll probably want to start looking sooner rather than later. Most real estate agents recommend starting your search six months before moving day. That way, you’ll have plenty of time to find the right property, believes Mamdoh.
6. Don’t Forget About Negotiation
Negotiation is an art form where both parties try to get the best deal possible from each other. While negotiation skills are important at almost any stage of life, they become even more crucial when buying a home.
There are several ways to negotiate a better deal. The key is to understand the seller’s motivations behind selling their property. This way, you can figure out whether they want to sell quickly or if they are willing to wait until the price drops further.
7. Be Realistic About Your Expectations
As you prepare to purchase a home, remember that you’re not just purchasing a piece of land. Instead, you’re buying space with appliances, furniture, and pets! So, think carefully about what you need and expect from a home. There’s a lot at stake, especially if you plan to live in the home long term. You’ll have to be realistic about your expectations to get the best deal possible.
You should expect to pay a higher price for rental property because you’re giving up some equity. Also, you’ll likely face challenges from tenants who aren’t willing to abide by the terms of their lease.
Finally, as with any investment, rental property will not generate a large monthly paycheck immediately, and choosing the wrong property could be a disastrous mistake. Nonetheless, rental properties can be profitable to invest in real estate. But renting out your place for a while could help you figure out whether you’re cut out to be a landlord, believes Mamdoh.