Summer is literally flying by! I can’t believe how fast it seems every day is going. It’s important for my family and me to spend time together before the kids go back to school. There are so
Finding Success In Rental Properties
With Albuquerque’s rising rental costs and influx of new residents from other states, it’s undoubtedly a great market for investors looking to purchase an investment property. Purchasing an investment property requires a lot of studies, planning, and budgeting. Not just any ole house will do, you need to understand the cost of ownership beyond the price tag to make the right purchase that will allow you to plan and prosper for the future
I recently read a great article from Albuquerque Investment Property, that gave a variety of helpful information for those who are thinking about purchasing an investment property. It seems like a no brainer that it is all about location, location, location! However what exactly makes a location desirable enough to bring demand and keep it rented? Key locations will be close to amenities and public services. You will also want to look for a property that is located in an area that offers entertainment and shopping options. Safety is a key factor to all of us and this will be a priority to your potential renters. Another thing to consider is a property that needs a little updating may cost you less to attain and yield a sustainable profit for the future. At the same time you want to be aware of the surroundings when you are out with your Realtor™ looking at potential properties for indications of potential trouble. Things like a lot of graffiti, trash on the streets and abandoned buildings aren't the most sought after by renters. If your investment property is spending considerable time vacant you wont be making the returns you expected.
The initial property purchase won't be your only cost and you need a plan in place before you make that first offer. You will want to make sure you are getting the best possible interest rate and set realistic goals on what your overall annual return from the investment will be. For many property investors a 6% return on the property is considered ideal for the first year. The plan you develop should include a practical budget as well. The 50% rule is a good one to keep in mind and basically if you will be charging $1,000 per month in rent you want the property to only be costing you $500 per month. Your monthly cost will need to cover not only the mortgage but also insurance, marketing, maintenance and any repairs.
The more you know, the greater chance your investment will perform well with that in mind you will want to talk to others in the area. Choose professionals you trust and make sure to ask as many questions as possible; don't leave any details to chance. A property with too many projects may hurt your cash flow so make sure on any fixer uppers that you can handle the expenses with out running into shortages. Purchasing an investment property is a significant financial decision and should not be taken lightly. If you have been thinking about purchasing an investment property for a while, it's time to call a Realtor™ to get answers to all your questions and start to work on an action plan.