Snohomish County Real Estate Guide
10 Tips for Real Estate Investing
– Be a Real Estate Investor!
When it comes to investing, everybody has certain goals and aspirations. However, we have found that there are certain guidelines every aspiring real estate investor needs to know Please see the tips for real estate investing below:
1. Compare Property Values and Rents:
Financial statistics only go so far; the best measure of a property’s market value is often the sale prices of nearby properties. The same holds true for area rents. A low price can often be justified by a reasonable rent; renters who can afford a high rent can afford to buy instead, so reasonably priced rent is a need.
2. Be Careful – Tax Laws May Change:
Don’t base your tax investment on current tax laws. The tax code is constantly changing, and a good investment is a good investment regardless of the tax code. Another one of the tips for real estate investing is finding the right property with the right financing. That is what you should look for as an investor.
Start in a market segment you know. Whether you focus on fixer-uppers, foreclosures, starter homes, low-down payment properties, condominiums, or small apartment buildings, you’ll benefit from experience by specializing in one aspect of investment real estate properties.
4. Know The Costs Going In!:
Know the financial statements inside out. What are operating expenses? What are loan payments? Vacancy costs? Taxes? What does the cash flow statement look like? These are key issues that must be addressed before making a solid investment.
5. Know Where Your Tenants Are Coming From:
If the last rent increase was recent, your tenants may be considering a move. If tenants have a short-term lease, they may be living there simply to attract unsuspecting buyers. It is also important to collect the tenants’ security deposits at closing.
6. Assess The Tax Situation:
Taxes are an integral part of successful real estate investing, and they often make the difference between a positive cash flow and a negative one. Know the tax situation, and see how it can be manipulated to your advantage. It may be a good idea to consult a tax advisor.
7. Investigate Insurance Coverage:
If seller’s coverage is based on lower-than-current replacement value, your insurance cost may increase when you pay a higher purchase price.
8. Confirm Utility Costs:
Ask the local utilities to verify recent utility expenses, especially if any of these costs are included in your tenant’s rent.
9. Consult Your Accountant:
Taxation is a key element of successful real estate investing. Find an accountant who is well-versed with the constantly evolving tax code is one of the important tips for real estate investing.
Make sure that you always perform a thorough inspection of the property before buying it. Never, ever buy any property without at least examining the site. In all cases, hiring a professional inspector is a sound investment.
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