If you’re thinking about purchasing an investment property for the first time, you’ll soon discover that there’s plenty for you to learn.
Investing in real estate can be quite complicated, as there are legal and financial aspects, as well as extensive requirements involved. To be successful, you need plenty of research in order for you to build a solid foundation of knowledge, before you buy your first investment property.
If you’re looking for an investment property in Fairfield, now is a good time as trends show a 3% year-over-year increase in median sales price, as well as a 4% increase in median rent per month.
Here are a few essential tips to keep in mind about real estate investing:
Location, location, location
Location is definitely one of the key factors to consider when investing in real estate. You have to be sure you’re investing in a property in an excellent location.
One of the most effective strategies is to look for the least desirable home in the most sought-after street. Investing in this property will give you an opportunity to build equity. You can then invest in repairs and renovations to improve the home – if you’re successful, you’ll end up with a move-in ready home in a fantastic location.
Know the tax benefits
The US government encourages private investors. More private investors providing housing means there’s fewer responsibilities for the government to handle. That said, you can expect significant tax benefits from the US if you’re a real estate investor. Find a trustworthy tax advisor who can work with you so you’ll be able to understand all the specifics.
Follow the 1% rule
If you’re going to rent the property out to one or more tenants, one way for you to find out if it’ll be worth the price is by using the 1% rule. This rule basically states that each month, the property must generate 1% of the home’s total price. For example, if the property you plan on buying costs $250,000, it should produce a monthly rental income of $250,000 x 1% = $2,500.
Want more helpful tips about real estate? Check out this page.