The 4 Step Guide to Buying Rental Property In Costa Mesa

When you are buying rental property in Costa Mesa or any of the surrounding Orange County areas, your purpose is to get a desirable location for a fair price that will allow you to realize a long term profit.Not only does this change the way you look at the house, it also changes the way you might finance it.Here are 5 tips to help you make the best decision:1. COMPILE A RENTAL SURVEYInform yourself about the average rents of the neighborhoods around the area you are looking at. Determine how much you can charge. And don’t forget to estimate the possible expenses for the property management fees, taxes and maintenance. Your goal is to own a property that the largest number of people would consider renting and that is not too expensive to maintain.2. CREATE A PLAN B. COULD YOU LIVE IN IT?When you look for properties to rent out, make sure they are adequate for your own standards and needs. Since you are going to own this property, ask yourself if it’s a home you could consider living in. The word 'slum lord' is more work than most people are willing to take on. Be proud of your property; you'll attract a better quality tenant!3. DO YOUR ESTIMATES:Estimate the monthly rental income and subtract your mortgage payment together with the interest, tax and insurance. Before you pull the trigger, make sure your investment is cash flow positive or at least a break even.4. EVALUATE THE EXPENSES:Once you’ve estimated your cash flow, subtract your cost of management and a budget for repairs. And don’t forget to include the ‘vacancy factor’. If your cash flow is still positive, you’re on your way to a good purchase! And if it’s negative, don’t despair: the depreciation write off could turn the loss into a profit. Talk to an experienced real estate specialist about this, and they’ll be able to assist you analyzing the numbers.If you are thinking of buying rental property in Costa Mesa, Huntington Beach, Newport Beach and the areas surrounding any of these cities, we can definitely help you make the best investment!Call us anytime at 714-540-7355 or email us at valerie@torellirealty.com and we can literally walk you through the entire process: from finding the best deal to providing you with a reliable property management service!