Purchasing your first Warminster single-family rental property can be a thrilling experience. However, just as with every investment, there are risks. Let’s make sure that your first investment property purchase in Warminster is profitable! Before making that decision to buy, go over these helpful details. By recognizing the value of the insight being provided, you can feel a sense of security with your first rental real estate purchase.
The successful outcome of purchasing your first single-family rental home will greatly depend on the clearly defined end goals you’ve set for yourself, even before deciding to invest. Contemplate on the multiple features to consider in an investment property, even before you go on a property search. Such as, looking for properties in a certain area, with a specific number of bedrooms, or minimum square footage. By knowing the specifics, you can refine your search criteria and locate potential properties faster.
While it’s important to identify which features you want in your property, it is also just as important to be financially prepared to purchase an investment property. Before searching for a property, make it a point to settle personal debts and then save up for a down payment, as per industry experts’ suggestions. The reason being is that a reduced personal debt will allow you to qualify for more favorable loan rates. After all, mortgage loans for an investment property will require a 20% down payment. It’s always good to be one step ahead in planning your finances, but be cautious of high-interest loans or mortgage products that seem a little too good to be true. By prequalifying with a reputable mortgage lender, you will be ready to seize the investment opportunities as they arrive. By making financial readiness a priority, you can more confidently buy that rental property when the time comes.
Act upon these important preliminary steps and then you can begin searching for the right property. Essential to your search for the right property is for you to run a series of numbers on each prospective property, including your margins, operating expenses, and expected return. This is all too common of a mistake — one that new investors typically fall into.
New investors sometimes forget to include all of the expenses related to purchasing and preparing the rental property for lease, as well as any ongoing property management, maintenance, and vacancy costs. Industry experts suggest a margin goal of 10% and a 6% return in your first year means that you have a profitable investment.
Lastly, you mustn’t forget that an investment property is just that, an investment. Getting attached to a particular property or allowing emotions to guide your decisions is not a good idea. Also, the property you buy is not necessarily a property that you would ever live in yourself. For your first investment, industry experts recommend opting for low-cost properties in high-demand areas. However, stay away from fixer-uppers. If you aren’t into the home remodeling business, and you have no connections to a quality contractor who will do the work for less than the going rate, it’s best to avoid them. The objective is for you to launch into a long and profitable investment career through the acquisition of your first single-family rental property. With this in mind, you steady the course and keep your investment properties in the black.
Finding the perfect investment property is only half the journey; the other half ends with a great Warminster property management team. Contact Real Property Management Prosperity at 267-433-4200 now.
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.