3 Tips Before Buying a New Investment
Analyze the principal, interest, property tax, and insurance (PITI) per month. Subtract your rental estimate from your PITI. Is there positive cash flow? This is the first factor in a good investment.
Location, location, location. We’ve all heard it, and it’s true. Renters flock to areas that are desirable. Universities with a high graduate population have great potential for rental properties. While the tenant turnover will be higher than other areas, there is always demand.
A good real estate investment is close to where you live, low maintenance, and offers an easy system for managing your property and tenants. For example, let’s say you have a single-family home you rent out that is 10 years old and 10 miles from your home. The property management can be simple. Hire a lawn care service, a maintenance person, and use The Real Estate Cafe for collecting rents and communicating with your tenants about maintenance requests.
