Landing your first Henrico County single-family rental property can be one of the most memorable experiences of your life. It can’t be helped, though, that there are risks involved in this particular investment. Your first investment property purchase in Henrico County should be profitable for you. Here’s how we can do that. Keep reading so that you can come to a successful outcome with your first rental real estate purchase.
First off, before you decide to purchase a single-family rental home, make sure that you have clearly defined end goals. Examine the different qualities to be considered in an investment property. This will save you a lot of time when you finally decide to begin a property search. For instance, your search might be 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.
Besides knowing what qualities you want, it is important to be financially prepared to purchase an investment property. Based on the recommendations of industry experts, it is a good idea to resolve any personal debts and save up for a down payment, before proceeding to property search. This is a good idea since reduced personal debt will help you better qualify for more favorable loan rates since all mortgage loans for an investment property will require a 20% down payment. Advanced financing is commendable but always double-check on those 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.
Once you’ve taken into account all of these important preliminary steps, you can start looking for the right property. When on the search for a property, never forget to run a series of numbers on each prospective property, including your margins, operating expenses, and expected return. It’s not unusual for new investors to commit this error.
New investors sometimes forget to include all of the expenses related to purchasing and preparing the rental property for lease, as well as any 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.
However, don’t get too “invested” in an investment property. After all, at the end of the day, it is only that — an investment. Getting attached to a particular property or allowing emotions to guide your decisions is not a good idea. 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. You can do without fixer-uppers. Only consider them if you are competent at home remodeling or if you are well connected with quality contractors who are willing to do the work for less than the going rate. The aim is to use your first single-family rental property as a platform for obtaining a long and profitable investment career. In doing so, you can keep yourself in check, and your investment properties continue to grow in profit.
The best thing to do when you’ve found your perfect investment property is to find yourself a competent Henrico County property management team. Contact Real Property Management Richmond Metro at 804-417-7005 now.
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