It can be a very stimulating moment when you obtain your first Rio Rancho single-family rental property. Still, with every investment come risks. In Rio Rancho, your first investment property purchase must be as profitable as can be. Let’s see what we can do to do just that. By following these key steps, you can come to a sense of accomplishment with your first rental real estate purchase.
Clearly defined end goals are what you need to have before you purchase your first single-family rental home. One important detail that you need to go over before you search for property is the different qualities found in investment properties. A few 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.
To be certain of what qualities you are looking for is just as important as it is to be financially prepared to purchase an investment property. A piece of advice from industry experts is to pay in full any personal debts so that you can start saving up for a down payment. Afterward, you can start searching for a property. Since all mortgage loans for an investment property will require a 20% down payment, you might want to consider applying for more favorable loan rates. To qualify, you would need to have had reduced personal debts. Make the necessary arrangements for advance financing, but don’t forget to be on the lookout for those 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.
When you’re done going over these important preliminary steps, you can begin your search for the right property. In the pursuit of searching for the right property, do not neglect to run a series of numbers on each prospective property, including your margins, operating expenses, and expected return. All too often, new investors falter due to a lapse of judgment in this area.
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.
Ultimately, know that an investment property is just that — 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. Steer clear from fixer-uppers unless your knowledge of home remodeling is sufficient, or if you can call on a quality contractor who will do the work for less than the going rate. Make it your intention to pursue a long and profitable investment career. You can do this through the purchasing of your first single-family rental property. Consequently, this keeps you guided and steady, as you keep your investment properties profitable.
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