Are you thinking about getting started with investing in Houston Rental Property? If so, you’ve come to the right place.
In this post we will provide you with several tips for getting started with investing in rental property so you will start enjoying positive cash flow and enjoy all of the benefits of owning rental property.
The media and real estate professionals continually report that 2012 is the year to buy real estate. Since home values have dropped considerably, the U.S. median list price has dropped considerably, too. Couple that with interest rates that are the lowest they’ve ever been and it’s a perfect storm of real estate buying opportunity, especially for starting out your career as a landlord.
Here are tips to get started. And, if you start a few years out of college, and amass several properties, you will probably be retiring early.
Go for the long haul — Rarely do people increase their wealth by owning property for short periods of time. Long-term investing in cash flow-producing assets like real estate is the way to go.
Don’t’ give up your day job! – You need a solid job to be able to save money for a down payment and be able to obtain financing to buy properties.
Buy cash flow-positive properties – If you don’t understand why to do this, you might want to skip real estate ownership. See “What is a Good Real Estate Investment” article.
Buy a property that you love! – The more you love the property for all the right investment reasons, the better chances you’ll own it long term.
Skip the prize properties – Prize properties have negative cash flows and are NO prize, it’s the moderately priced properties that are the real prizes.
Buy as a personal residence to change to rental – Buy properties in life that make good rental property investment sense and first live in them as a personal residence. When you buy as owner occupant, you get the best financing and can put down a smaller down payment if you so desire. Plus you learn the property characteristics, issues, and can fix issues so they won’t be issues once you make it a rental. Then, move out after one to three years and into your next personal residence that will become a rental property a few years later. This also ensures you will only buy properties in areas where you are willing to live, and that’s very important to do as a real estate investor.
If it sounds too good to be true, it is! – Real estate is high risk as there are many things that can go very wrong. If it sounds too good to be true, be very careful. Once you take ownership of the property, you have to correct the problems and issues,or live with them.
Fully educate yourself for 3-6 months – Talk to other people who own properties, read books, go to the local real estate investment clubs, etc. The better you educate yourself, the higher the chances you will take the proper steps to reduce your risks and make smart and safe decisions.
Buy properties in good shape – Fixer-uppers are money pits and rarely sell at a large enough discount to compensate for all the work needed. Buy properties that are as close to rental ready as possible. A great move, if possible, is to buy a property with a good tenant already renting the property!
Be conservative on your expectations – Always overestimate the amount it will cost to renovate a property, underestimate the rental income you will earn, and overestimate the expenses you will have to pay. Then, when you blow it out of the water, you’ll have a big smile on your face and be able to gloat to all your friends!
Source – Zillow
Contact Vestpro Residential Services
For more information on the on how to get started with owning Houston Rental Property, or to learn more about the property management services we can offer you contact us today by calling (832) 498-0016 or click here to connect with us online.