Everybody knows that the price of the rent for a house is influenced by so many things, starting with the location of the house or apartment and ending with the contents of the said house. Some people earn a lot of money by simply renting out apartments in a complex, or houses to different tenants.
However, even if this can be a successful business, is not something easy. Real estate investment requires a lot of knowledge in this area, and always a thorough analysis of the market.
Here are a few tips about how to do great real estate investments, even if you are a beginner in this area.
First of all, you need to know how much money you have available for buying a property that will bring you profit. You will need to have a considerable amount for this, as it’s better to buy a small apartment complex, than a single house. Identify the possibilities for using your own finances, finding a financial institution that offers you a loan or finding investors. Each of these options is viable, so start looking.
Once you have determined the amount of money that you can use, start looking for a property. There are many available properties in your area, so all you have to do is find the right one. Consider the location of the building and also what advantages are there for using it – the access roads, the magazines that are around, if there is any park. All these count, because with many advantages it would be easier to find tenants.
The House Inspection
This is something you will have to request, because it is the only way to know the condition of the property. The house inspector will tell you all about it, as he/she is highly trained in finding exactly if there is something wrong with the building. You will know about the structure of the building, the walls, the roof, the plumbing, and the materials that were used and if there are any faults with the building. The house inspection will also tell you if you need further investment in repairing different problems.
The House Valuation
This procedure will give you the market value and the investment value, if you ask for both of them. Usually, the second one is certainly needed, especially because you are looking to make an investment and not just buy the property for yourself. The valuer will give you a better evaluation if you have available the report from the house inspector. This way, you will know exactly what your building’s worth is if you plan to invest in it.
Once you have bought the building, determine who you will be working with. You certainly need a plan for making it work, and it is better that you are surrounded by people you trust. Managing a complex of apartments can be hard enough, so you will probably need a manager, if you can’t do it yourself. Keep in mind though that a manager will ask you the regular price for maintaining, no matter if you have tenants or not.
No matter what you’ve heard about real estate investments, make sure you remain realistic in your expectations. If you don’t find tenants, you will have to sustain your business for some time. A constant cash flow can be considered after all the apartments have been rented, and you remain with some profit after you pay the mortgage (if you have any), the bills and the utilities and so on.