3 Tips For Investing In Rental Properties

0
15

Buying rental properties takes a lot of time and money, but it can have lucrative results if executed properly. To invest in the right rental properties and achieve monetary success, it is important to do your research and take your time. Here are 3 tips for investing in rental properties.

Tip 1: Use Leverage To Buy Property

If you are planning to invest in rental property, it is crucial to understand the mortgage market. If you do not understand the mortgage market, you are unlikely to invest in rental property properly. In contrast, you can keep costs lower and reduce uncertainty if you know how to use the mortgage market.

When you know how the mortgage market works, you can begin to buy property using leverage. In other words, you can use borrowed money to free up money for any repairs or future investments.

Of course, you need to keep in mind that you will need to pay financing costs when you use leverage to buy property. It is best to consult a professional when using leverage to ensure that you are choosing a financial strategy best for you and your needs.

Tip 2: Avoid Fixer-Uppers

Just as day trading is different from buy-and-hold investors, real estate traders are different from buy-and-rent investors. In other words, real estate traders look to sell their property in less than six months, whereas buy-and-rent investors plan to use the property for their long term uses.

Although fixing and renovating a worn-down property may seem like a good idea for either purpose, it is not worth your time and energy as a new rental property investor. So, it is best to avoid fixer-uppers when you are new to rental property investment.

Fixing a rental property takes a lot of expertise, time, and money. If you are new to rental property investment, you should view yourself more as a real estate trader. Doing so will allow you to focus on immediate results that you can use to strengthen your rental property skillsets.

Tip 3: Buy A Low-Cost Home

One of the best ways to start investing in rental property is by buying a low-cost home. Low-cost homes are a great option because they will require less money upfront and require less ongoing expenses as well.

Most experts recommend starting with a $150,000 home or less in an up-and-coming neighborhood. This will ensure that the home has value in terms of its neighborhood without being extremely expensive for you.

Additionally, it is recommended to never buy the nicest nor the worst home in the neighborhood. The nicest home will often be overlooked for more affordable options next door, while the worst home will be avoided for better options.

One feature to look out for in a low-cost home is acrylic solid surfaces. These surfaces increase the value of the rental property, which will allow you to charge more for rent.

Additionally, consider low-cost homes with a tilt wall construction. Just as the acrylic solid surfaces increase rental value, tilt wall constructions do as well. Finding a low-cost home with either of these features is a great way to secure a higher paying rent.

Final Thoughts

Investing in rental property can be an overwhelming task. It is best to use leverage to pay for property, avoid fixer-uppers, and buy low-cost homes on your first go around. Doing these three things will allow you to get your feet wet in rental property investment without committing yourself to too much work or money.Skylar Hammond is a writer for True Trader who specializes in topics such as stock trading, personal finance, and forex. He focuses on helping beginners and experts alike learn more about the market and improve their trading skills.

*** SPECIAL August 30, 2020 UPDATE — ONE of this Year’s Motley Fool Stock Picks Has Already Quadrupled, One has Tripled and Two have Doubled! ****

We have been tracking ALL of the Motley Fool stock picks since January 2016. That’s almost 5 years and over 110 stock picks. As of Friday, August 28th one of their 16 stocks picks from 2020 has already quadrupled (TSLA), SHOP has tripled and another two have doubled (ZM and HUBS). In addition, 4 of their 2019, 8 of their 2018, 7 of their 2016 and 10 of their 2016 picks have also doubled. Best of all, over these 55 months, the average stock pick is up 111%. That beats the SP500 by an average of 87%. And that’s even accounting for all of this COVID mess that has wreaked havoc on some stocks but presented opportunity for other stocks. THAT is how the Fool does so well!

  • Shopify (SHOP) – April 2, 2020 pick and it is already up 201%
  • Zoom Video (ZM) – March 19, 2020 pick and it is already up 142%
  • DexCom (DXCM) picked Feb 20, 2020 right before the market crashed and it is still up 39%
  • Tesla (TSLA) picked January 2, 2020 before the crash and it is up 414%
  • HubSpot (HUBS) picked December 5, 2019 and it is up 98%
  • Netflix (NFLX) picked November 21, 2019 and it is up 68%
  • Trade Desk (TTD) picked November 11, 2019 and up 152%
  • Zoom Video originally picked Oct 3 and it is up 289%
  • SolarEdge (SEDG) picked September 19, 2019 and it is up 44%

Now, no one can guarantee that their next picks will be as strong, but our 5 years of experience has been super-profitable. They also claim that since inception, their average pick is up 529% and now we believe them. You sure don’t want to risk missing out. Many analysts are saying that we have passed the bottom of this COVID crisis and stocks will recover quickly. So make sure you have the best stocks in your portfolio.

Normally the Fool service is priced at $199 per year but they are currently offering it for just $99/year if you click this link.

CLICK HERE to get The Motley Fool’s Stock Picks for just $99 per Year!



GET UP TO $1,000 IN FREE STOCK

WHEN YOU OPEN A ROBINHOOD BROKERAGE ACCOUNT

Robinhood was the first brokerage site to NOT charge commissions when they opened in 2013. They just past 10,000,000 accounts and to celebrate they are offering up to $1,000 in free stock when you open a new account.

Here’s the details: You must click on a special promo link to open your new Robinhood account. Then when you fund your account with at least $10, you will receive one stock valued between $5 and $500. Then, you will get a link to share with your friends. Every time one of your friends opens an account, you will receive another free stock valued between $5 and $500. Click here to learn more about this Special Robinhood offer.

Claim your free stock NOW (before it’s too late)



LEAVE A REPLY

Please enter your comment!
Please enter your name here