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5 Things You Need To Know Before Buying Rental Properties
If you are thinking about making a living from buying rental properties, then it is essential that you learn as much as possible about the most effective ways of doing it, as well as the things to avoid.
This article will help, by telling you 5 things you need to know before buying rental properties. By the end of the article you should have learned some useful things that will help you to make money from property, not just today, but in the long run as well.
Letís jump straight into it.
1 - Have a strategy
You have to formulate a strategy that is right for you from the word go. It is no good looking one week for one bedroom apartments and the next week for five bedroom houses. You have to focus on what you want to get out of a career in property investing, and then you need to put together a strategy and a plan around these goals and then focus totally on achieving them. Donít get distracted with anything else, just focus on what your strategy is and in the beginning make sure you stick to it.
2 - Itís a numbers game
Donít be fooled into thinking the first property you look at will be a bargain that you will buy, refurbish and rent out for a huge profit. You have to understand that the likelihood is that you will have to look at tens if not hundreds of properties to even find one that fits your criteria.
Psyche yourself up and be prepared to look at lots of properties. Now, this doesnít mean spending hours on the road driving round 20 properties a day. Most">All it might mean is you looking at 200 properties in you local newspaper on a Thursday afternoon, and from there you might find five to call up, you might go and actually visit three of these five and then put an offer in on one or two.
Another alternative is to get someone else like a property finder to do a lot of the searching for you, and then you just pay them a commission when they find you properties that meet your criteria.
3 - become an expert accountant
You donít have to be a maths whiz, but you do have to learn to account for all your costs and know ahead of time what your costs are likely to be. To many novice property investors and developers buy property at below market value, only to find out that the reason they were able to buy it so cheaply was because it has huge problems and the cost of putting these problems right will be more than the price it is worth at the end of it all.
4 - Buy in the right location
If you are buying rental properties you need to make sure you are buying them in a location that has a history of providing good rental returns and few voids. Donít buy in locations where there is no rental demand, you will be wasting your money and will probably have to sell the property anyway.
5 - Aim for low maintenance properties
Stay away from properties with a history of maintenance problems or properties that are likely to provide you with maintenance problems. When you become a landlord and are renting out properties, maintenance issues are one of the biggest drains on your income. So, if you can identify potential problem properties before you even buy them, it will save you a lot of time, headache and money in the long run.
If you follow the guidelines above, you should stand a much better chance of buying rental properties that successfully make you a profit from day one.
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