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Best Guide For First-Time Investment Property Buyers


Real estate promises one of the best routes for passive income. Whether you are planning a vacation rental or regular rental with monthly passive income, the US real estate is promising for investors both ways. But like any stock or bond, a stellar future with realty largely depends on a wide range of parameters. From neighborhood to rental yield to median property values to job market to amenities- there are plenty of factors to check out while choosing you investment property.

The post below offers the one-stop guide for first time investment property buyers.

Study the markets with hottest rental yield

First, you must get a thorough study on the US cities with highest rental yield. When you are planning for an investment property, your rental ROI is a major decisive factor while choosing a deal. According to latest market reports, some of the cities with highest rental yield are- Raleigh, San Antonio, Salem, Orlando, Austin, Provo Orem, Las Vegas, Greenville etc. If you want to invest in vacation rentals, beachfront properties would be an excellent idea. South Florida is a prospective place for investing in waterfront vacation rentals.

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Check out the market condition

<p data-reactid="134"><span data-reactid="135"><!-- react-text: 136 -->After you shortlist the cities with highest rental yield, study their individual market conditions. These include neighborhood, housing types, property taxes, job market, housing prices, amenities and so on. You would also need to check the rules and regulations for the investors interested in the area and your attorney will help you here. It’s to note here, each State has its own specific rules regarding investments. Your bet would be on a city with low unemployment rate, easy access to education and healthcare, affordable housing prices, feasible property taxes and bevy of amenities. Low crime rate is another major criteria. Then, make sure to choose the property nearer to your current location as you would need to visit the land a number of times before closing.

Check out mortgage availability

This is one of the most important points for any property investor. After you finalize the city for investment, check out your mortgage eligibility. Your choice of property would be largely dependent on how much mortgage you are able to afford. Depending on your current situation, you might have to take steps to better your credit score for higher mortgage.

Understand operating expenses

The operating expenses (for new property) would be something like 35-80 percent of gross operational income. Make sure while choosing the property, neighborhood and while fixing the rental fee. If this is your first time, it’s better you start with a low-cost property.

Finally, you must get a trusted real estate broker who holds strong experience in representing investment property buyers in your chosen city.

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