Investments in real estate can be a lucrative source of passive income: The additional stream of income what they can bring can help you accumulate wealth. But getting started is not always easy, especially in this ultra-competitive real estate market…
“You must love at home” Redfin CEO Glenn Kelman tweeted during a recent Develop Twitter chat. “Most of the people I know who have made a lot of money on housing love the thrill of the hunt, are good at design, and know enough about home improvement to do the job on their own or to lead the people who do it.”
During Grow’s Twitter chat, Kelman and other real estate experts weighed in on what you should consider before starting your real estate investment game. Here’s their best advice.
Consider maintenance costs in time and money
As Kelman pointed out, home improvement know-how is a valuable skill when it comes to investment property. Maintenance can be time consuming and costly. If you don’t feel like you have the time, you may have to hire a property manager, says Certified Financial Planner Jeffrey Levin, Chief Planner at Buckingham Wealth Partners.
“Most people who own a home know how long it takes to maintain it,” he wrote. “The same applies to rentals!”
Choosing the right tenant is another way to lower your maintenance costs, says Margarita Cheng, Certified Financial Planner and CEO of Blue Ocean Global Wealth. “You don’t just need a tenant,” she wrote. “You need a tenant who pays rent on time and is respectful of your property.”
‘Understand the math’
“If you want to be an investor, you need to understand the math,” – tweeted the creator of the mortgage, Jennifer Beeston.
She explains that there are a number of questions you need to ask yourself before investing in investment property. “How much will the utilities cost? Does the property you are buying have a delayed service? How much will it cost you to rent this house? If you have a tenant who doesn’t pay for a month, do you have reserves? Do you have insurance to handle this? “
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Video by Helen Zhao
Homeowner insurance and real estate taxes are additional numbers to consider.
Beeston also offers to hire a real estate agent who specializes in investment real estate. They can break “if it really is cash flow, and that’s the key,” she says. “This is an investment, so you have to wear this business hat.”
“Start at the end”
Having a game plan is key, says Seth Williams, founder of REtipster.
“Start at the end,” he wrote. “Understand what your long-term goals are and how each investment property fits into your roadmap. Even the best investment property won’t make sense to every investor. Find out where you are trying to go and stick to the plan. ”
During the other part of the chatWilliams noted that having a game plan helps you set a hard cap on how much you are willing to pay for investment property in a market where betting wars are more common. “Renting a property is a business decision, not an emotional decision,” he wrote. “If the deal does not generate a positive cash flow relative to your asking price, move on to another property.”
Find out if real estate investing is right for you
Although real estate investments are often referred to as passive income, this does not mean that making money is easy, warns. CNBC Real Estate Correspondent Diana Olik… You can find this the other side is vanity or a passive source of income is more suited to your needs.
“Have a strong stomach. Being a homeowner or a flipper is not easy, ”she wrote. “This is a VERY hot market right now, so do your research and do a little self-analysis to determine if the stress return is worth it.”
Article “How To Get Passive Income From Real Estate Investments: First,” You Must Love Homes “ originally published Grow + acorns…
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