Did you know that you have the potential to make millions of dollars in real estate? In fact, you can experience these profits, regardless of how you choose to spend your time! Like the beach? Take that vacation to your chosen paradise, nestle down upon the glistening white sands on the edge of your chosen ocean, and sip on that pina colada that you have been craving. All the while, you will continue raking in profits! The secret lies in your ability to pick rental properties that have the potential to result in massive profits!
Now, the truth of the matter is, these million-dollar profits are not likely to hit your bank tomorrow. It may not even be soon. Real estate is not an easy path to riches, but it is one of the most concrete paths to solid, financial stability. Over time, you will experience a gradual increase in the amount of money that you make. You just have to do what is necessary to achieve the success that you desire. Real estate is a business that offers one of the safest and fastest paths to the financial freedom that most desire. In this guide, you will learn the strategies of top-rated real estate investors who specialize in rental properties.
What is it That You Truly Want?
If you are reading this, there is a reason why. Stop right here for a moment and seriously ponder the question, “What is it that you truly want?”. Could it be to eliminate your debt? A new home? To quit your current job? To pay for your kids to go to college? To move to a new location? To travel to Europe? To prepare for your retirement? Maybe…ALL of this?!?
If you specialize in real estate – with an emphasis on rental properties – we will tell you right here, right now – IT IS POSSIBLE!
You want it to happen.
You wish it to happen.
You must MAKE it happen.
Consider the following questions:
- Are you willing to be totally committed to taking action?
- Will you dedicate your spare time to the endeavor?
- Would you be willing to invest your money?
If you answered “yes” to the above questions, we encourage you to keep reading. Here, you will learn how to successfully pick rental properties that will prove to be highly profitable for you.
Why You Will Love Investing in Rental Property
Before delving into the steps that will help you pick the best rental properties, we would like to outline why you will absolutely love engaging in these types of investments:
- First, you may purchase rental properties with leverage. That is, it is possible to borrow money to increase the property’s return.
- You can use your own skills to experience greater returns.
- You have the ability to manage your investment in a direct manner when it is in rental properties.
- People will ALWAYS be in need of a place to live.
- The real estate market is considered to be relatively stable and very predictable.
- You can purchase all types of rental properties – from homes for single families to office buildings, all the way up to high-end multifamily apartment complexes and condos!
- It is possible to purchase rental properties below the market value, invest a little time and work, and increase the amount you can charge each month.
- There are many unique ways to experience profits in real estate.
- Many people have succeeded in rental properties; therefore, you know it is completely possible for YOU to succeed.
- You do not even have to be present to collect the profits!
Top Factors of a Profitable Investment
Now that you know that investing in rental properties IS the way to go, it is time to consider the top factors that lend to whether or not your investment will be a profitable one. Consider the following:
- First, evaluate the neighborhood where the rental property is located that you want to purchase. What types of tenants would you attract within the region? What would your vacancy rate look like? How much rent could you charge for the property? If the neighborhood is a location that would allow you to keep tenants and make the amount that you want, it may be a profitable property. Rental properties that would have a high vacancy rate or would have to be rented cheaply may not prove to be lucrative for you.
- Next, evaluate the costs of the property taxes in the area. If they are high, ensure it is a wonderful neighborhood and that the property would attract tenants that would rent from you on a long-term basis. If it is an unappealing neighborhood, you may find that high property taxes would be more of a detriment to your pursuits. Remember, if the property taxes will eat into your actual profits for the year, it probably is not a good real estate investment.
- To find profitable rental properties, you have to evaluate the job market in the area. People will instantly flock to where jobs are available. You may check the U.S Bureau of Labor Statistics, local unemployment offices, job boards, and other areas to learn more about the employment statistics in a specific region. If there are a lot of opportunity or new businesses are flocking to the area, the rental property you are interested in is likely to be a good pick.
- To determine whether or not a rental property will be a good pick, evaluate the amenities within the neighborhood. You should look around and see if there are parks in the area. Are there links to the public transportation system? Do you see restaurants and shopping venues? Perhaps a library, a gym, or a movie theater? If the area has a lot of amenities, it is likely to attract long-term tenants.
- If you will be renting out to families, you should consider the availability of the schools in the area and what the quality is with those schools. If the area lacks in this area, you will immediately discover that it negatively impacts the overall value that you paid for the rental property.
- Is the property located in a high-crime area? If you answered “yes”, do not even consider purchasing it – no matter how “good” the deal seems. Check the crime statistics. Inquire about the law enforcement coverage in the area. If it is low-crime and the neighborhood is properly watched, it may prove to be a good location for a real estate investment. If it is not, it will not prove to be a solid investment.
- The next consideration that should be made is whether or not there will be any future developments in the area that will have a positive influence on the possibility of tenants moving into the rental you are considering purchasing. You may obtain this information through the local building and zoning department.
- Now, evaluate the real estate market of the area. If it has many listings, it could indicate that it is not a good idea to invest in that area. You should determine what is causing the vacancies within the area. Is it because of an external factor (such as crime)? Is it because the landlords in the area are not keeping up on their properties? Perhaps they have the rent too high? Carefully consider the factors impacting high listings and vacancies prior to investing in the real estate in the area.
- What is the average amount that is charged for rent in the area that you are researching? You will want to obtain enough from rent to over any outstanding mortgage or loan, your property taxes, and all other associated expenses. If the average rent does not cover this, it is probably not a good idea to invest in the property. If you do, it is not likely that you will generate the profits that you desire. In fact, you may find yourself at a complete loss.
- Next, you must consider what type of weather conditions and natural disasters impact the area where you want to purchase rental properties. You will need to be aware of the potential dangers to your property so that you are capable of obtaining the right amount of insurance coverage for the property. Despite being a necessity, insurance will cut into your profits. It is often best to go for real estate in areas that are not known to experience flooding and similar types of events as it will save you a lot of money in the long-run.
- Once you have a list of potential properties in mind, you should evaluate all of the properties to determine which one has the best potential for earning appreciation and that which will allow for the highest level of cash flow. It is all about profits. Initially, you may have to spend a little more than you originally anticipated, but in the end, it could be the higher priced properties that will render you higher profits, over time.
- You should go for real estate investments that will take very little work to prepare for the market. In other words, if it requires a few cosmetic-based changes or only minor leveled renovations, it is likely considered an ideal investment. Remember, the less you spend, the more you will make – at least, generally speaking.
- When determining how much to spend for a rental property, figure out how much you need to charge each month for rent. Then, figure out how much you will make on that amount each year. Immediately following this, multiply that by 12. You will receive a figure. Never spend a total of more than this amount on your investment property. This is the best rule to go by when trying to find the best bang for your buck.
- Once you figure out how much is being charged for a property that you have an interest in purchasing, subtracted the mortgage that you have to pay each month. Then, take the property tax amount and divide both it and your insurance costs by 12. Then, provide a set amount for maintenance and repairs each month. By the time you finish this calculation, you will know what you need to charge for rent each month.
- Get a property manager to assist you. In doing so, you will easily be able to discover the most profitable rental properties currently available on the market.