How to purchase real estate as an investment.

How to purchase real estate as an investment.

There are many ways of going about purchasing real estate as an investment, but some methods are better than others. We have several ideas and suggestions that can make your investment better.

 

First Plan Out Expenses

Before you purchase a piece of real estate be sure to plan out all of your expenses. When you hire a property management group like CG Realty Group, we take care of repairs and caring for your property. But before you get started you should consider and budget in items such as repairs. Money magazine suggests to: “… add up the yearly operating expenses — property taxes, insurance, utilities, plus at least 5% of gross income for a maintenance/repair fund — and subtract that from the annual income. To get your cap rate, divide that number (the net operating income) by the purchase rate.”

 

Try Paying With Cash

You should consider purchasing a rental property with cash. Many financial advisors will warn against borrowing money to purchase real estate for investments sake. At the very minimum you should be able to afford the payments on the property when it is vacant, otherwise the property will end up being a burden instead of helping build your finances.

 

Do Your Research

Before you purchase real estate for investment sake be sure to do your research. Besides research about the structure of the property and safety, you’ll want to do research on what other properties of similar size are renting for in that area. This way you will have a good idea on how much you want to pay for the property and how much you will be making in return.

 

Purchasing a piece of real estate to use as rental property can be a very lucrative investment if you do it correctly. Together we can create a plan to get the most out of your purchase. Call us at 773-573-0101 to set up an appointment. We can discuss recommendations based on what your needs are for your rental property.  Or schedule an appointment online:

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