Building wealth through real estate investments increases your current monthly cash flow, and diversifying your portfolio into different investment property sectors provides you with a hedge against inflation. In addition, as the cost of living rises, both commercial and residential rents tend to keep pace, leaving investors living in the style to which they have become accustomed. But first, you will have to take baby steps when beginning a real estate investment business.
It is helpful to start networking with like-minded investors, and unless you intend to wear all of the hats, including repair work, keep in mind that you will need to build a support team of pros from every walk of the real estate industry. In addition, having a strategy to follow will help you succeed. Still, you will need to remain flexible with your investment properties because the factors influencing buying, holding, or selling are fluid.
Until you feel fully confident, it is wise to work with a trusted friend, family member, or professional investor to help keep you on track as you gain your footing in building your real estate investment portfolio. So read on as we explore four things you should do before buying your first investment property in Richmond.
Before buying your first investment property in Richmond, you’ll need to take an assessment of your creditworthiness and begin to work towards getting your financial ducks all in a row. You will also want to consider the impact of having a more significant down instead of putting little to no money down and the difference you will pay in interest on your investment. Once you’ve reviewed your financial snapshot, you can work towards correcting any credit issues and investigating the many different avenues of financing available to investors. In addition, there are options available for those with a bad credit history to overcome. Often, beginning investors find assistance among family members and close friends who want to see you get started on the path to financial freedom. With helpful suggestions about repairing your credit and the financing options you qualify for, there’s no better team than RVA Home Buyers to have on your side.
Taking a realistic inventory of the monthly expenses of the investment and understanding the hidden costs of owning an investment property are things you should do before buying your first investment property in Richmond. In addition, tenants will expect you to be ready to jump when they call about damages or problems with major systems, such as the HVAC. Therefore, you should have an emergency fund budgeted for unexpected repairs before buying to avoid getting caught with your proverbial pants down. You will want to have between three and six months of rental income on reserve. Depending on the age and condition of the home, you should set aside between 15 to 30 percent of the monthly rental income for your emergency repair fund.
Know Your Market
In real estate, the importance of the location of the property is imperative to the long-term value, so before buying your first investment property in Richmond, be sure you know your market. The actual location of the property is crucial; for instance, is the property in the flight path of a major airport? You must visit the site during the busy hours of a weekday instead of a quiet weekend evening where you may miss essential factors such as loud industrial-based noise that may seriously impact the enjoyment of the property and affect rental rates. Or do you have waterfront footage or water views? Even if the water is not directly accessible, pleasant views from the property can add significantly to the value. You should also keep your future tenants in mind and consider what they will be looking for in a rental property. Finally, dedicate yourself to taking time daily to stay current on market trends, watching for zoning changes, and plans for improvements in Richmond. Working with professional investors and our full-service team of industry experts means you are ready to run at full speed out the starting gate.
RVA Home Buyers
Before buying your first investment property in Richmond, you should first call RVA Home Buyers for a no-obligation consultation and let our intimate knowledge of the current Richmond real estate market benefit you. From locating properties to repairs and all levels of property management, working with the professionals at RVA Home Buyers means there’s no need for you to go it alone and learn the hard way. Helping investors like you achieve their dreams of financial independence and realize a golden retirement lived on your terms from the passive income on your investments is our passion at RVA Home Buyers. Why not find out how RVA Home Buyers can help you start living the dream and invest in your future with real estate today? Call RVA Home Buyers at (804) 420-8515.