Tips for Real Estate Investment

Real estate investing is one of the most popular investment strategies, but it takes a lot of knowledge and help to do it right. Investing in residential properties can bring great financial rewards if you avoid some common pitfalls for many investors. While any investment is a complex decision, you can easily prepare yourself to make the best possible investment. Here are some simple Dos and Don’ts of property investment.

Do Set Your Goals

Like with any good investment, you need to clearly understand what you hope to achieve by investing in a new home or property. Residential property investment can bring incredible rewards, but make sure you understand a few important things before you begin investing. Know Your Goals

• Are you renting or selling?

• Who is your ideal tenant?

• How are you financing?

• Can you afford yearly expenses?

• Can you afford have your assets tied

up in a house?

Don’t Fall In Love

Buying a house can be a romantic experience, especially if you have to put a lot of hard work into renovating a home. But remember that this is an investment, even if you did pour your heart and soul into a fixer-upper. Take pride in your work, but don’t let that pride get in the way of renting or selling your new investment. Tip: When searching for a home to buy, don’t think as a resident. Think of what will be easiest for you as a landlord or seller. Tenants might not need a pool, a fenced yard or breakfast nook. Amenities can be nice, but they’re also costly to maintain.

Do Know A Good Investment

You should know the elements that make a home attractive for your target market. For instance, a home near a university will need different attention than a park-side condo in a big city. • Local Neighborhoods – Where do people want to live? • Taxes – Property taxes differ across municipalities, so understand your

liability. • Job Market – A depressed local economy can be a bad sign for renters. • Rents – Research the average rent in an area to make sure it will exceed

your mortgage, taxes and insurance. • Schools – Targeting families? You’ll want to make sure you can meet

their needs. • Vacant Rentals – If there are a lot of empty rentals in the area, you may

want to scope out another location, but low vacancies can mean higher rents.

Don’t Avoid Long-Term Investments

Owning a home is one of the best ways to build long-term wealth, and that holds true for investment properties as well. However, many investors expect they’ll be able to invest and flip a house quickly for a profit. Unfortunately, it’s not as easy as they make it look on TV. Making your investment home part of your long-term investment strategy produces predictable future cash flow and builds the kind of long-term wealth that house flippers can only dream of.

Do Find a Financial Partner

First-time investors often seek out seasoned investment veterans, but it can be difficult to find a partner you like and trust. That’s why it can be beneficial to get financing help from a proven Mortgage Banker like New American Funding. We have a number of investment property loans that offer flexibility for investors. Tip: An FHA 203k Home Improvement Loan can give you the low-rate financing you need to purchase the property and then have extra cash to pay for any improvements you need to make.

Don’t Overpay

Now that you’ve got financing lined up, it’s time to make the most of your money. The years after the housing market crash have seen a boom in property investment, and it’s still a buyer’s market for now. This means you can afford to be selective with the properties you buy. Do your research, find properties that fit your criteria and negotiate to make the deal work for you. Tip: You should also be careful not to borrow more than you need to buy the house and make any necessary repairs. It’s all too easy to get in over your head with an investment property, so if this is your first investment home, start with a smaller home until you know the ropes.

Do Your Research

Good investments come from learning the market. Real estate investment should not be rushed into. First, you should find an area that meets your criteria for renting or selling – low vacancies, higher rents, low costs, etc. – and then research properties in the area. Take at least 3 – 6 months to get to know your prospective area by talking to other investors and local real estate agents to get the lay of the land. Doing some extra homework before jumping into an home investment can save you big time.

Don’t Limit Your Market

Finally, you shouldn’t limit yourself to the area around where you live. Most often, good investments are found in other locations, so don’t just look around your neighborhood and expect to rent or sell a home for profit. Areas to Watch

• College and university towns

• Big cities with higher rents

• Growing suburbs

• States with growing markets like Texas or California

Tips for Real Estate Investment

Get the help you need to finance your property investment at

www.NewAmericanFunding.com