Obtaining your Twin Falls single-family rental property can be a fantastic opportunity. However, like all investments, certain risks are always included. So that your first investment property purchase at Twin Falls will become as profitable as you hope it will be, there are a lot of things you need to learn before you buy. Through keeping the most critical of these considerations in mind, you can make your first rental real estate purchase a success.
Also, one of the first things to bear in mind when purchasing your first single-family rental home is to put clearly defined end goals. Before you begin your property search, you need to know what you’re looking for in your investment property. Let’s say that you may be searching for properties in a certain area, with a specific number of bedrooms, or minimum square footage. By knowing the specifics, you can refine your search criteria and locate potential properties faster.
To decide what characteristics you are searching for in a property, it is important to be financially prepared to purchase an investment property. Industry experts advise buyers to pay off any personal debt and begin saving for a down payment before progressing to the next step, which is property search. Reduced personal debt can make you meet the criteria for more favorable loan rates, while almost all mortgage loans for an investment property will require a 20% down payment. Pre-financing is another critical step but be vigilant for high-interest loans or mortgage products that seem a little too good to be true. By prequalifying with a reputable mortgage lender, you will be ready to seize the investment opportunities as they arrive. By making financial readiness a priority, you can more confidently buy that rental property when the time comes.
Now, after these important preliminary steps have been taken, the hunt for the right property begins. The most important thing to consider in your search is that you should run a series of numbers on each prospective property, including your margins, operating expenses, and expected returns. There are a lot of new investors that make serious mistakes here.
New investors often fail to mention all of the expenses related to purchasing and preparing the rental property for lease, as well as ongoing property management, maintenance, and vacancy costs. Industry experts suggest a margin goal of 10% and a 6% return in your first year means that you have a profitable investment.
Furthermore, it should be remembered that the investment property is just that, an investment. Being attached to a particular property or allowing emotions to guide your decisions is often frustrating. Also, the property you buy is not necessarily a property that you would ever live in yourself. For your first investment, industry experts recommend opting for low-cost properties in high-demand areas. But avoid fixer-uppers, unless you are a highly qualified home remodeling specialist or know a quality contractor who would do the work for less than the going rate. Your first single-family rental property should be a step towards a long and profitable investment career, rather than the end goal in itself. In this manner, you should keep yourself on track and your investment properties in the black.
If you found your perfect investment property, ensure that you hire the best Twin Falls property management team. Feel free to contact Real Property Management Magic Valley at 208-734-4001 today.
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