Acquiring your first Flushing single-family rental property can be quite the experience. As it is, risks are present in every worthy investment. To guarantee that your first investment property purchase in Flushing is profitable, we’ve written down a few particulars that might benefit you. Your first rental real estate purchase will be even more rewarding and fulfilling if you pay attention to the details to follow.
Before the purchase of your first single-family rental home, do yourself the favor of setting clearly-defined end goals. There are several qualities to be found in an investment property. Determine which ones you are looking for before you search for a property. Some of these might be properties in a certain area, with a specific number of bedrooms, or minimum square footage. By knowing the specifics, you can refine your search criteria and locate potential properties faster.
It is important to be financially prepared to purchase an investment property, especially when you’ve already examined which qualities you want for yourself. If you have any personal debts, it’s best practice to pay them off, so that you can start saving up for a down payment. Consider settling these two before you make any property search, as is the counsel of industry experts. When you start saving up for a down payment, remember that all mortgage loans for an investment property will require a 20% down payment. If you want to qualify for more favorable loan rates, it’s best to reduce your personal debts. Be wary, though, of high-interest loans or mortgage products that seem a little too good to be true. By prequalifying with a reputable mortgage lender, you will be ready to seize the investment opportunities as they arrive. By making financial readiness a priority, you can more confidently buy that rental property when the time comes.
After acting on these important preliminary steps, you can then begin your search for the right property. Always remember, though, to run a series of numbers on each prospective property, including your margins, operating expenses, and expected return. This is a serious mistake that many new investors make.
New investors sometimes forget to include all of the expenses related to purchasing and preparing the rental property for lease, as well as any ongoing property management, maintenance, and vacancy costs. Industry experts suggest a margin goal of 10% and a 6% return in your first year means that you have a profitable investment.
In conclusion, never forget that there are other important things in life aside from investment property. Remember, when all is said and done, it is only an investment. Getting attached to a particular property or allowing emotions to guide your decisions is not a good idea. Also, the property you buy is not necessarily a property that you would ever live in yourself. For your first investment, industry experts recommend opting for low-cost properties in high-demand areas. Unless you happen to know the ins and outs of home remodeling or have access to quality contractors who are willing to do the work for less than the going rate, it would be wise to avoid fixer-uppers. Your first single-family rental property is the stepping-stone to a long and profitable investment career, not the ultimate end itself. Through this, your investment properties remain profitable, while you stay on track.
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