Become a Millionaire
Become a Real Estate Mogul
(Money magazine) -- Becoming a landlord has always been a well-worn path to millionaire status, with good reason: Not only does owning properties let you generate a second source of income, your tenants' checks will help you build equity in your investment.The case for owning rental real estate is even more compelling now thanks to depressed prices, super-low interest rates, and the fact that the shortage of rental housing is the most acute it's been in five years, according to CoreLogic.
Where to Start
Where to look. Begin your search near large employment centers or universities, where strong rental demand will ensure profitability.
How to price it. Your operating income -- rents minus expenses, not including debt service -- should be at least 1.25 times your principal and
interest, says mortgage broker Kathleen Kramer.
How to dress it up. Don't scrimp on amenities. A few upgrades, such as granite countertops, will make your rental stand out and reduce vacancies.
How to vet tenants. For $10 to $30, services such as LexisNexis and mysmartmove.com will run credit and criminal background checks.
Work with a REALTOR that has experience with working with other like investors . Buying and investment home is a specialty.
I recently closed on an investment property that was purchased at $53,000 repairs required post closing $5000-$10,000(mostly paint and carpet) renter was identified pre closing at a rent rate of $1100 / per month. Buyer used a conv 80% loan (monthly payment include HOA and taxes) less than $600 / month yep
PI was $228.75 HOA was $113.00 (included lawn service) interest rate 4.125% on a 360 month. Average growth rate in area in a weak market 2% in a normal pre bubble market 6%. So the investor has a property that will yield cash follow on a ten year average grow 4% / year in value and still get the tax deductions.
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