Investing in rental properties generates a steady stream of income because money is deposited into your account on a monthly basis. You’ll be putting money into your bank account without having to go to work every day.
1. Find out where you’re gonna invest
There’s a million places to invest in real estate around the world but you need to pick one place.
It’s nice to find your first deal locally or at least within you an hour or two away from you so dig into websites like realtor.com or zillow.com and start looking around your area at different properties to see kind of what prices look like kind of get a feel for where prices are higher and where they’re lower.
2. Get pre-approved
Once you have your location nailed down you know where you’re going to invest get
pre-approved to figure out your financing, for your first deal a bank or like a local lender is going
to be a great way to get started financing your real estate. Talk to us to see what programs you can qualify for,
3. Learn how to analyze properties
Knowing how to analyze a rental property is the single greatest skill an investor can have. A local property manager will be able to tell you in like a two minute conversation. It’s good to get a real clear picture on the expenses that you’re going to have every single month. You may want to know how much the insurance will cost and other expenses. When analyzing deals you need to look hard at two things; first is the monthly cash flow you will end up with in profit every single month and second is knowing what’s called cash return you can actually make in a year compared to how much you invested. Like if you invested twenty dollars into an
investment and you made two dollars in profit in the first year, that’s ten percent, good job. Now if you invested twenty thousand dollars into a real estate deal and you made two thousand dollars in cash flow in profit during year one that’s a ten percent return in year one ten percent cash in cash return now it’s not a bad number to shoot for ten percent.
4. Shop for properties
So at this point you got to start looking at properties and trying to determine based on the numbers what could actually work out now for most people especially when you’re first starting
out. There are other off-market ways to find deals but you can also spend a lot of time on sites like realtor.com or zillow.com to see what’s currently for sale on those websites
5. Make your offer
It’s not that complicated but just you know in a competitive market you do have to
be quick and smart you’re going to also get rejected all the time it’s okay, real estate is a numbers game. Eventually you will get into negotiation with a seller and then from there hopefully get the property under contract now when you do get your property under contract
6. Due diligence
Due diligence is all the stuff you do between signing the contract. Get insurance on the property and then finally you’re going to sign documents, wire your down payment, the bank’s gonna wire their money in and you’re gonna close on the property. First thing first is to schedule an inspection on the property from a local property inspector, your agent will have a good recommendation they can help you pick a title company which will help do the closing or an attorney to do all the paperwork. Also, if you’re buying a property that already has tenants in it you want to make sure you verify the rental amounts they were getting.
For more information, please don’t hesitate to email us at contact@ozbroker.com.au or you may give us a call at 0426667696.
