Getting started in real estate investing can be a daunting process. This is true even if you have had the experience of buying a home before. There are so many factors to consider when investing in real estate. Many of which you do not experience when buying a home that you plan to occupy. The stress and uncertainty do not disappear after the closing of your rental property either. Luckily there are steps that you can take to hopefully mitigate many of risks that are involved in buying a rental property.
As is the case with any property, you will want to do your due diligence before buying a rental property. However, there are many more factors to consider than researching your primary residence. The home you live is often much more of an emotional decision based on personal likes and dislikes. However, a rental property should purely be a quantitative decision. Things like ROI, cap rate, and cash flow are all part of the decision. The location of the home your buy and the price you buy it for are crucial inputs to this very important equation. If you have not done market research to ensure that the equation nets to a profitable transaction, you need to reevaluate your decision and go back to the drawing board.
If you have found a property that meets all of the specifications of a profitable investment, the financing of the home may put a kink in your plans. Financing a rental property is much more difficult than an owner occupant home. Because of this, you will want to put forth the effort to ensure that you are working with the best lender. Contracts can often fall apart at the final hour if you are not working with a reputable lender who knows how to navigate the financing of a rental property. Do your homework, and only work with the best of the best.
If you are interested in buying or selling a property in the Costa Mesa area, Contact Torelli Realty.