Posts Tagged ‘purchasing rental property’

Follow A Checklist When Purchasing A Rental Property

Thursday, April 30th, 2015

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Real estate investors who are considering purchasing a rental property should make sure that they have their I’s dotted and T’s crossed.  In other words, these investors should have a good understanding of the entire process.  Those who take the time to follow a checklist of sorts when searching for the most ideal rental property will likely be able to capitalize on the results.  Here we will go over how to judge a rental property and decide its worthiness.

The first factor to consider when making a checklist and purchasing rental property is the area a property is located in.  Those who end up purchasing an investment in a growing area with a large number of available tenants should be able to take full advantage of what their investment offers.  These regions are likely to increase in value and an investor can raise rental rates accordingly.

The second factor to check off before purchasing a rental property is the condition of the property itself.  Those who end up purchasing a property that doesn’t need a large-scale rehab should be able to move quickly and secure a tenant within the first couple of months.  Those who do so will be able to earn a consistent cash flow and won’t have to worry about performing large-scale maintenance issues.

Before purchasing a rental property, an investor has to verify the condition it is in.  When performing this feat, hire professional help, including a professional inspector in order to have a solid understanding of the investment being considered.  A professional inspection should provide an investor with a complete understanding of all the major systems and allow them to base their buying decision on concrete evidence.

Before purchasing a rental property, an investor should make sure that it is profitable in theory.  Those who are able to analyze a property through a cash flow analysis should be able to determine the quality of the investment.  When performing this cash flow analysis, it is important to have it verified by a number of sources in order to be sure it is accurate.

The final aspect to consider before purchasing a rental property is the seller of such an investment.  Those who are willing to negotiate an offer and give an investor a bit of leeway should be considered.  The best way to ensure this is to work with a desperate seller who is in a position where they need to sell their property in a short period of time.

Investors who stick to a checklist when purchasing a rental property should end up with a 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.

Purchasing Rental Property Is A Great Way To Enter The Real Estate Field

Monday, February 16th, 2015

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Investors who are looking to make their entrance into the real estate field should consider rental property before all other options for a variety of reasons.  Investors who understand the advantages of purchasing rental property should have a long-term outlook on their investment and earn equity in their property over the years.  Here we will summarize the process of searching for a rental property and capitalizing on such an investment.

The first step of purchasing rental property involves finding the best location on the current real estate landscape.  Since location is everything when it comes to earning an income in the real estate field, take the necessary time required to obtain an understanding of a region.  Look at the economic conditions in the area and speculate on the future of a region.  If a certain location appears to be in an uptrend for years to come, purchasing an investment property in such a region is likely a good choice.

The advantages of purchasing rental property are summed up by one word, leverage.  In other words, investors who purchase rental property can utilize bank funding in order to capitalize on the deal.  Investors should talk with the different lending institutions in the area and find out which establishment is willing to offer the best deal.  Investors can also capitalize on rental property by utilizing the services of a property management company.  Those who do so will be able to sit back and allow the day-to-day work to be handled by this company.

When purchasing rental property, take a look at all the options on the market and meet with the owners of such properties.  Ideally, come to a negotiation with a seller who is desperate to sell a property, if a property has been determined to be profitable.  Those who end up working with a seller who is selling their residence for personal reasons often end up obtaining the best property for the money.

After purchasing rental property, allow this property to flourish by focusing on what tenants want.  Those who put their tenants first will be able to focus on giving them exactly what they are looking for.  Since tenants are everything to a rental property owner, they must be treated like royalty.  Properties that have some of the most desirable amenities will likely remain full throughout the investment period, if they are properly advertised.

Investors who follow these steps when purchasing rental property should end up with an investment that meets their needs.

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 What Questions To Ask Before Purchasing Rental Property

Monday, February 16th, 2015

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due diligence in order to earn a profit on the investment. Those who are able to find a seller who is desperate to sell their property and work with them should be able to earn the greatest profits.As always, an investor needs to perform their profit analysis beforehand in order to determine if an investment is worth pursuing.

The first question to ask when purchasing rental property is whether or not the person who is selling the property is the owner.  Investors who are able to work directly with the owner of such a property should be able to allow their negotiating ability to work for them. Investors who end up working with a representative for a property are bound to end up paying a middleman in order to secure the deal. Investors should simply refuse to work through a middleman and only directly with the owner of a property.

Another question to ask when purchasing rental property is how long a property has been on the market. Investors who are able to target properties that have been on the market for a period of months should be able to negotiate with the seller of such a property. These sellers are generally desperate and are looking for a buyer even if they have to lower their asking price.  Investors who are able to determine the condition of such a property and make a suitable offer should be able to capitalize on the exchange.

Another question to ask before purchasing rental property has to do with the cash flow. Sellers who are able to present their cash flow in a clear format, while giving valid numbers should be able to demonstrate the profitability of a property. Investors should perform their own cash flow analysis in order to verify the validity of these claims.

Investors who ask these questions before purchasing rental property should end up with an investment that allows them to prosper.

Factors To Consider When Purchasing Rental Property

Tuesday, December 9th, 2014

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Investors who want to earn a profit in the real estate industry, but don’t want to take on a great amount of risk should consider investing in rental property.  There is a reason that so many investors have invested in rental property and beginning investors who follow suit should be able to earn an income in this field as well.  Investors who keep in mind the main factors to consider when purchasing rental property should be able to capitalize on their positive cash flow and earn an income in this industry.

Investors who are looking at purchasing rental property should meet with the financial institutions in the area and take advantage of leverage.  Find the lender who is willing to offer the best rates, along with the best terms and capitalize on lender financing.  Rental property is one of the only investments where an investor can borrow the capital necessary to purchase their investment.

Before purchasing rental property, an investor should already know how they plan to run their business.  Investors who plan to perform all the work alone should set up a schedule and stick to it, if they wish to keep their properties in good shape and keep their rentals full.  Investors who have properties with a large number of units almost always decide to hire a property management company to handle the daily routine and ensure that tenants are being prospected.

When purchasing rental property, investors should understand their costs and determine how much profit they are going to earn monthly.  In order to do this, investors should consider both their positive cash flow and negative cash flow.  The positive cash flow is going to be based on rental payments exclusively.  Investors who want to have a theoretical idea of how much they will likely gross should assume that a maximum of 90% of the units will be rented out at any given time in order to avoid becoming overly optimistic.

When it comes to negative cash flow, there are many streams that can cut into an investor’s bottom line.  Investors should consider the cost of their mortgage payment first and foremost.  A general rule is that the mortgage payment shouldn’t cut into more than 50% of one’s positive cash flow.  The other 50% of the positive cash flow should be able to cover the maintenance, the advertising, the tenant issues, and provide a small profit on a monthly basis.

Investors who are considering purchasing rental property should follow this guide, if they wish to obtain the most profitable 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 What To Consider Before Purchasing Rental Property

Wednesday, November 6th, 2013

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Analyze a rental property and the costs associated with it before purchasing one in order to avoid getting stuck with a bad 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 there are a number of factors to consider before purchasing rental property.  Those investors who take the time to make sure that these issues amount to a profit can confidently enter the rental property business.

The first factor to understand before purchasing rental property is the amount of capital the entire endeavor is likely to cost.  Investors who understand how to properly analyze this realize that there is more to this than what meets the eye.  Investors who are securing lender financing need to have the down payment, which is likely to be at least 20% of the value.  Those who are purchasing a $500,000 rental property need at least $100,000 just for this.

Investors should also have a substantial amount of cash on hand before purchasing rental property and should have at least the first 6 months of mortgage payments.  This will give them a safety blanket when getting started with this investment.  If the mortgage happens to be $2,500 a month, an investor should have at least $15,000 stored away in order to be able to pay the rent in the event of potential problems.

Investors should also have a substantial amount of money in an emergency fund before purchasing rental property.  This fund can cover a wide assortment of problems, from vacancy to making necessary repairs.  Consider placing at least $5,000 in this fund in order deal with any issues that happen to arise.

The next factor to understand before purchasing rental property is the cash flow situation.  Investors need to be articulate when determining exactly how much positive cash flow they are likely to receive and how much negative cash flow will be pouring out.  Those who can properly analyze these numbers will know exactly how much profit they will be earning on a monthly basis.

When calculating the positive cash flow, assume that the rental will not be completely full.  Figure that only 90% of the potential positive cash flow will actually be coming in.  When analyzing the negative cash flow, consider all the factors that go into it.  Consider the taxes, management fees, advertising fees, maintenance fees, the insurance and anything else that will bite into the profits.

Investors who do their homework before purchasing a rental property are bound to find themselves in a profitable situation.

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.