Investing in real estate is one way to build wealth and some passive income every month. Grant shares a few things that you need to know when considering investing in property.
To know the market is knowing what you can get for rents. For example, earlier this year Grant helped a client purchase a $425,000 duplex. They decided to purchase that particular duplex because of what they could get for rent. This particular property had 3 bedrooms and 1 bath on one side and 3 bedrooms and 2 baths on the other. Based on the current market, we figured the client could get $600 per bedroom making it $1,800 for each duplex per month. In the end, the client was able to get about $2,000 per month for each duplex totaling $4,000 per month which could then be used to pay down the mortgage and get closer to the kind of passive income that he’s looking for.
Knowing what your utilities on the property will be is extremely important. Once you know what the utilities are, you then have to figure out who will be paying those. Will you include some things in the cost of rent or will your tenant be responsible for all utilities.
Next, you need to decide who will manage the property. Will you manage it yourself or will you pay a property management party to take care of that for you. These are decisions that can’t be taken lightly because self-management takes time and hiring someone else to do it takes money, so thinking about this before purchasing can help drive key decisions when you find a property.
There are many other aspects that come in to play when purchasing an investment property. If you have any questions, please contact us and we would be happy to help.