Posts Tagged ‘purchasing a rental property’

Purchasing A Rental Property Is The First Step Towards Financial Independence

Tuesday, October 21st, 2014

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Those who are thinking about purchasing a rental property should understand how this business works before venturing forth.  Rental property can be a great source of income and has the ability to endow its owners with financial independence.  Investors who understand the basic steps to profiting with rental property can simply rinse and repeat, purchasing as many rentals as possible.

The first steps of purchasing a rental property require an understanding of the business and market research.  Investors should have a thorough understanding of all aspects of this venture and should understand exactly what they are looking for.  In order to find the most ideal investment, investors should take a look at a number of rental properties before choosing one.

When considering purchasing a rental property, invest in a region that is improving its economical profile.  A general rule is that regions that are experiencing population growth are undergoing an increase in value.  Investors who are able to purchase a rental in a region like this should be able to capitalize on both rental rates and property values.  These investors should also have plenty of tenants available on the market.

Investors who are considering purchasing a rental property generally obtain lender financing in order to do so.  Obtain a pre-approval letter from the bank and look for properties that are within this financial range.  Ideally, purchase a property that is demonstrating that it is cash flow positive and likely to remain so.  While cash flow is dependent on the region, investors should shoot to purchase a rental that is earning at least an 8% cash on cash return.  Many investors decide to perform all the property management duties alone on their first investment.  While this can allow an investor to earn more income, they will also have to work hard in order to allow their investment to succeed.

Investors who are purchasing a rental property with the intention of obtaining a nice portfolio of rental properties should understand how to place their investments on autopilot.  Investors who are able to obtain lender financing should be able to purchase a number of properties.  In order to make sure that all of these properties are profitable, an investor should hire the best property management company on the market.  After this, an investor shouldn’t have to physically perform much work, but should periodically keep an eye on their investments.

Investors who decide that purchasing a rental property is the best choice for their investment goals should follow these steps in order to succeed.

Asking questions with these tips in mind will help save real estate investors thousands.  For more ideas related to real estate investing, call or visit us a Homevestorsfranchise.com.  We are the nation’s number one home buying franchise with over 15 years of experience.  Our company has a vast assortment of real estate investment and real estate franchise opportunities available to help you grow your real estate business.  Come see us for more information.

Planning Phase Of Purchasing A Rental Property

Wednesday, August 27th, 2014

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Real estate investors who have a long-term real estate investment plan will often do better than those who have a short-term approach.  The real estate niche that best supports a long-term investment is rental property and most investors opt to enter this field due to its security.  Those who are in the planning phase of purchasing a rental property should consider a number of different factors before following through with their purchase.

The first step of purchasing a rental property involves planning, research and inspection.  During this entire process, investors should have the patience to see as many properties as possible.  Investors will be able to dismiss most properties immediately, put a few others through a continued analysis and continue to research the market for other candidates.  During this first viewing, investors should avoid getting into negotiations with a seller and think about the deal for a couple of days before following through.

The second step of purchasing a rental property, involves checking a property out for a second time.  During this trip through a property, an investor should invite a professional analyst to come with them.  This professional should be able to point out problems areas and help an investor make a decision regarding the quality of a property.  This resource is invaluable and investors should always obtain a few different opinions from industry experts before committing to the deal.

After a second viewing an investor should know whether they want to continue with the process of purchasing a rental property.  Investors should now perform more research regarding a particular property and find out everything they can about it.  During this process, an investor should perform a cash flow analysis and get an idea of how profitable a rental is.  This will allow an investor to decide on the price they are willing to pay for a property and move into negotiations with a seller.

When purchasing a rental property, negotiate the final value with a seller and obtain the best deal possible.  Ideally, an investor should be dealing with a seller who is desperate to sell their property quickly and need the money.  Investors who dealing with a seller like this can negotiate with ease and come to an agreeable deal.  When negotiating with sellers, point out problem areas and use them when making a case for a certain price.

Investors who plan out their actions before purchasing a rental property often end up with a more profitable investment.

Asking questions with these tips in mind will help save real estate investors thousands.  For more ideas related to real estate investing, call or visit us a Homevestorsfranchise.com.  We are the nation’s number one home buying franchise with over 15 years of experience.  Our company has a vast assortment of real estate investment and real estate franchise opportunities available to help you grow your real estate business.  Come see us for more information.

Benefits And Drawbacks To Purchasing A Rental Property

Tuesday, July 15th, 2014

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Real estate investors who have been thinking about purchasing a rental property should understand the benefits and drawbacks before coming to a decision.  Most investors who are looking for a stable investment that will offer them returns for years to come choose to invest in a rental property.  Investors who are looking for quick riches and don’t have the patience to stick with an investment for an extended period of time should opt for a different investment.

The benefits of purchasing a rental property are multifold and are well known throughout the real estate community.  Investors who purchase rental property can take advantage of leverage by using bank financing to handle the majority of the purchase price.  This can enable investors to hold onto their liquid capital for other uses.  The biggest advantage of rental property is that one can earn cash flow month and after month.  This allows investors to continue to earn a profit without holding an investment that is costing them money.

Another advantage of purchasing a rental property involves another form of leverage, using a property management company to handle day-to-day activity at a rental.  This allows investors the free time necessary to enjoy life and search for new investments.  Investors who have decent size properties will benefit to the greatest degree when using a property management company.

The drawbacks of purchasing a rental property need to be considered before deciding that rental property is the right choice.  The biggest drawback of rental property and real estate in general is that it is an illiquid asset.  Investors who choose a bad investment property often end up with an investment that they can’t sell quickly when things go south.  These investors end up trapped in their investment and have no choice, but to sell it at a steep loss.

Another drawback of purchasing a rental property is the amount of problems that are likely going to cause an investor grief.  Investors who own rental property are always going to have tenants who cause problems, as this is the nature of the business.  Investors need to understand that they are going to have to deal with tenants who don’t pay their rent on time and those that damage a property.  Investors who put effort into their tenant screening can reduced these problems somewhat, but issues will arise never the less.

Investors who understand the benefits and drawbacks of purchasing a rental property can make an informed choice before closing on the deal.

Asking questions with these tips in mind will help save real estate investors thousands.  For more ideas related to real estate investing, call or visit us a Homevestorsfranchise.com.  We are the nation’s number one home buying franchise with over 15 years of experience.  Our company has a vast assortment of real estate investment and real estate franchise opportunities available to help you grow your real estate business.  Come see us for more information.

HomeVestors Knows That Purchasing A Rental Property Capitalizes On The Market Trends

Monday, June 30th, 2014

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The number of potential tenants continues to increase throughout the United States, making rental property a great investment. 

Dallas, Texas HomeVestors is the nation’s number one home buying franchise and has helped real estate investors purchase 50,000 properties over the years.  The company knows that owning a home is not a part of the American Dream anymore.  Many people are now content renting out their residence and not having to worry about the volatility of the housing market.  Investors who are thinking about purchasing a rental property can capitalize on this growing trend.

Those investors who have been considering purchasing a rental property should do so and capitalize on the current market trends.  Since so many people have decided that they are committed to rental property, those who own rentals are bound to profit.  Many people are viewing rental property as more appealing than homeownership for a variety of reasons.  The number one reason why most people don’t want to own a home is because they don’t want to get caught in a negative equity situation.

Homeownership was never considered a good long-term investment and lay people are finally catching onto that fact.  Many realize that they will not earn a fortune through homeownership and even worse, might end up losing money.  The real estate market is at an unpredictable point and many don’t want to commit to homeownership at this time.  Investors who are purchasing a rental property can earn an income from this lack of confidence and rental property allows investors to earn income even when the market is unstable.

The truth is that 70% of everyday people believe that the United States housing market is still suffering from a crisis and 20% believe that the worst is yet to come.  This uncertainty is going to give those who are purchasing a rental property an advantage.  Rental property allows people to take up short-term housing without worrying about the state of the housing market.

So many people are taking on short-term jobs and don’t know how long they will stay in one area.  These individuals are choosing torent property because they are free to move at a moment’s notice if a better opportunity presents itself.  Investors who are thinking about purchasing a rental property should capitalize on this generation of nomads and earn an income from the current state of the United States economy.

Those who are interested in purchasing a rental property should follow through with their intent in order to capitalize on the growing number of tenants on the market.

Focus On Location Before Purchasing A Rental Property

Tuesday, June 10th, 2014

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Investors who are considering purchasing a rental property should focus on finding the best region before pursuing any investments.  Those who take their time and make sure that they purchase a property in a developing section of the United States are likely to keep their rentals occupied and benefit from increasing rental rates.  Investors who do their due diligence may also end up with a property that increases in value over the next couple of years.

Investors who take their time and decide on the best region before purchasing a rental property should end up making a good decision.  Since profits with a rental property are region specific, location is everything.  Look at locations that are increasing in population due to economic expansion and don’t have enough apartments to keep up with the growing demand.

Since the amount of competition for housing in a location like this is going to increase over the years, rental rates will have to increase accordingly.  Investors will be able to earn even more from an already great investment.  The nice thing about rental property is that an investor can lock into a fixed rate mortgage and should be able to earn even more money over the course of their investment, thus earning even greater profits.

Make sure a property will remain full throughout the investment before purchasing a rental property.  Investors who perform cash flow calculations should assume that a property would be 90% full throughout the course of the investment.  Investors who can keep a property full throughout the entire investment will be able to earn even more from their investment.

Investors who focus on the region before anything else should end up purchasing a rental property that increases in value over time.  While this isn’t crucial for an investor to profit, it is a nice result of doing the proper due diligence.  Investors who end up profiting from both the rental rates and an increase in property value have done everything correctly and should congratulate themselves on the choice they have made.

Investors who focus on the news and have a good understanding of the economic capacity of certain areas can judge them before purchasing a rental property.  Considering that location is the most important aspect of any real estate investment, investors who take their time and research an area are likely to benefit in the end.

Investors who perform due diligence before purchasing a rental property should find that they end up with a profitable property on their hands.

Asking questions with these tips in mind will help save real estate investors thousands.  For more ideas related to real estate investing, call or visit us a Homevestorsfranchise.com.  We are the nation’s number one home buying franchise with over 15 years of experience.  Our company has a vast assortment of real estate investment and real estate franchise opportunities available to help you grow your real estate business.  Come see us for more information.

Purchasing A Rental Property That Turns Out To Be Profitable

Monday, February 24th, 2014

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Purchasing a rental property is the most popular option when entering the real estate field.  Those who do so are able to leverage capital, earn a consistent income and enjoy any increases in property value.  Unfortunately, there are many hurdles that need to be jumped when investing in a rental property.  Investors who perform the proper due diligence are generally able to sidestep these issues.

The advantages of purchasing a rental property are numerous, but those who focus on the negatives of rental property and learn how to avoid them are set to enter the field.  The first key to finding a rental property that is likely to remain full and increase in value is to understand the area.  Investors who purchase real estate investments that are located in areas that are increasing in economic prosperity are the ones who are able to take advantage of the market as a whole.

In order to determine if an area can support a thriving rental property, have a good understanding of the industries in the area and the overall energy.  Are people moving to the area or away?  If the population is increasing rapidly, people are moving to the region, as it provides prosperity.

After determining that an area is a good region for purchasing a rental property, look for a specific property.  When searching for a property, the specific location is important.  Properties that are located near city center or a region that has a great deal of action should remain full.  Investors who can be assured that their properties will take in the greatest amount of positive cash flow can invest with confidence.

Before purchasing a rental property, perform the necessary due diligence on a property.  Does the property appear to be in good condition or does it have a large number of problems?  Hire a professional inspector before purchasing a rental property, as this will ensure that a property is indeed being advertised accurately.

After a property has been determined to be in good condition, determine if the cash flow allows one to profit.  Get a good understanding for the positive and negative cash flow and make sure that a property appears to be profitable on paper.  If not, work with a seller and inform them that their property is priced too high.  Then, make them an offer on their property, but be prepared to walk away, if they happen to say no.

Investors who analyze a property and the area it is located in can make an informed decision when purchasing a rental property.

Asking questions with these tips in mind will help save real estate investors thousands.  For more ideas related to real estate investing, call or visit us a Homevestorsfranchise.com.  We are the nation’s number one home buying franchise with over 15 years of experience.  Our company has a vast assortment of real estate investment and real estate franchise opportunities available to help you grow your real estate business.  Come see us for more information.

 

HomeVestors Knows How To Analyze The Costs Before Purchasing A Rental Property

Tuesday, November 5th, 2013

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There are many costs that many investors don’t consider before getting involved with a rental property.  Those who have a fair estimation of these costs are able to perform a proper analysis.

Dallas, Texas HomeVestors is the nation’s number one home buying franchise and has helped real estate investors purchase 50,000 properties over the years.  The company knows that investors who are thinking about purchasing a rental property need to understand the costs of the business.  While the prospect of collecting rental income every month excites many investors, they should also have a firm understanding of the negative cash flow as well.

When thinking about purchasing a rental property, understand that there are costs for management fees, marketing, maintenance, services, insurance and others.  These all need to be considered when understanding the cash flow of a rental property.  While many investors may find a property that they feel would be profitable, all the calculations need to be performed before committing to it.

Before purchasing a rental property, understand how it will be managed.  Those who hire a management company are looking at costs that greatly exceed those that plan to manage the company on their own.  Those who own large rentals are going to be subject to hiring a management company in order to handle all the day-to-day activities.  These costs are in the ballpark of $300 to $500 a year per rental.  Before actually purchasing a rental property, check with the various property management companies and get a quote from each in order to determine which is the best value.

Those who are thinking about purchasing a rental property also need to account for marketing fees that are required to keep the property full and avoid vacancies.  These fees generally account for $150 to $200 a year per rental.  Rentals that are in excellent locations that draw tenants in naturally won’t have to spend as much and can reduce these numbers somewhat.

Another huge cost that has to be assessed before purchasing a rental property is the maintenance.  This needs to be performed on a set schedule and an owner has to avoid becoming lax regarding the proper maintenance.  Rental property owners can expect to spend about $500 on maintenance a year per rental.

Before purchasing a rental property, understand what the insurance will cost as well.  While this can vary greatly by geographical location, expect to spend anywhere from $200 to $300 a year per rental.

Before purchasing a rental property, have a firm understanding of all the costs that go into it.

About HomeVestors of America Inc.

Dallas-based HomeVestors of America, Inc. is the largest buyer of houses in the U.S., with 50,000 houses bought since 1996. HomeVestors trains and supports its independently owned and operated franchisees that specialize in buying and rehabbing residential properties.  Most commonly known as the “We Buy Ugly Houses®” company, HomeVestors strives to make a positive impact in each community.  In 2012, for the seventh consecutive year, HomeVestors was among the prestigious Franchise Business Review’s “Top 50 Franchises,” a distinction awarded to franchisors with the highest level of franchisee satisfaction.  For more information, visit www.HomeVestors.com.