Building wealth through real estate investments increases your current monthly cash flow while diversifying your portfolio into different investment property sectors. This provides you with a hedge against inflation. In addition, as the cost of living rises, both commercial and residential rents tend to keep pace, leaving investors living in the style to which they have become accustomed. But first, you will have to take baby steps when beginning a real estate investment business.
First and foremost, it is helpful to start networking with like-minded investors. Also something to consider is unless you intend to wear all of the hats, including repair work, keep in mind that you will need to build a support team of pros from every walk of the real estate industry. Having a simple, focused strategy on accomplishing this will help your financial goals. Still, you will need to remain flexible with your investment properties because the factors influencing buying, holding or selling are always fluid.
Until you feel fully confident, it is wise to work with a trusted friend, family member, or professional investor to help keep you on track as you gain your footing in building your real estate investment portfolio. Keep in mind, that these key life members should have already proven experience involving real estate. Sometimes opinions of what they believe to be true about real estate can be more hurtful than helpful! So read on as we explore four things you should do before buying your first investment property in Conway.
Financial Ducks
Before buying your first investment property in Conway, you’ll need to take an assessment of your creditworthiness and begin to work towards getting your financial ducks all in a row. Once you’ve reviewed your financial snapshot, you can work towards correcting any credit issues and investigating the many different avenues of financing available to investors. In addition, there are options available for those with bad credit history to overcome. Often, beginning investors find assistance among family members and close friends who want to see you get started on the path to financial freedom. With helpful suggestions about repairing your credit and the financing options you qualify for, there’s no better team than Clear Property Management LLC to have on your side. We’ve been there and can help you think of issues that are a few steps ahead of you along your journey. Better to realize them now instead of when you have already put money into a deal.
Realistic Budgeting
Taking a realistic inventory of the monthly expenses of the investment and understanding the hidden costs of owning an investment property are things you should do before buying your first investment property in Conway. In addition, tenants will expect you to be ready to jump when they call about damages or problems with major systems, such as the HVAC. Therefore, you should have an emergency fund budgeted for unexpected repairs before buying to avoid getting caught with your proverbial pants down. You will want to have between three and six months of rental income on reserve. Depending on the age and condition of the home, you should set aside between 15 to 30 percent of the monthly rental income for your emergency repair fund. This can seem daunting in the beginning trying to come up with this sizeable about of cash but you will thank yourself if something does happen down the road.
Another thing to consider if you getting antsy on your first deal, is to make sure your inspection goes well for the bigger ticket items. If you choose to buy a newer home that doesn’t need to have a lot of repairs to it then your reserve funds don’t have to necessarily be that high in the beginning. While, I’m not saying not to have a healthy reserve account for expenses, I’m saying that if you have newer, well maintained properties that your reserves don’t necessarily have to be a full 6 months in the beginning. You can grow it once you get a tenant in place down the road.
Know Your Market
In real estate, the importance of the location of the property is imperative to the long-term value, so before buying your first investment property in Conway, be sure you know your market. The actual location of the property is crucial and in my opinion, the most important. For instance, is the property in the flight path of a major airport? You must visit the site during the busy hours of a weekday instead of a quiet weekend evening where you may miss essential factors such as loud industrial-based noise that may seriously impact the enjoyment of the property and affect rental rates. Also, do you have waterfront footage or water views? Even if the water is not directly accessible, pleasant views from the property can add significantly to the value. You should also keep your future tenants in mind and consider what they will be looking for in a rental property. Finally, dedicate yourself to taking time daily to stay current on market trends, watching for zoning changes and plans for improvements in Conway. Working with professional investors and our full-service team of industry experts means you are ready to run at full speed out the starting gate as we are already tracking this information for other investors in the area. We have the systems in place, take advantage of it!
Clear Property Management LLC
Before buying your first investment property in Conway, you should first call Clear Property Management LLC for a no-obligation consultation and let our intimate knowledge of the current Conway real estate market benefit you. From locating properties to reliable contractors and all levels of property management in Conway, working with the professionals at Clear Property Management LLC means there’s no need for you to go at it alone and learn the hard way. Helping investors like you achieve their dreams of financial independence and realize a golden retirement lived on your terms from the passive income on your investments is our passion at Clear Property Management LLC. Why not find out how Clear Property Management LLC can help you start living the dream and invest in your future with real estate today? Call Clear Property Management LLC at 501-642-0202.