Moore - Rental property investing: a beginners guide to rental real estate investing: how to create wealth with rental property business

RENTAL PROPERTY

INVESTING

A Beginner's Guide to Rental Real Estate Investing: How to Create Wealth with Rental Property Business

Eddy Moore

Copyright 2019 Eddy Moore

All rights reserved

Rental Property Investing

Copyright 2019 Eddy Moore All rights reserved.

Written by Eddy Moore

First Edition

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Please note that content of this book is based on personal experience and various information sources.

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This book is only for personal use. Please note the information contained within this document is for educational and entertainment purposes only and no warranties of any kind are declared or implied. Readers acknowledge that the author is not engaging in the rendering of legal, financial or professional advice.

Please consult a licensed professional before attempting any techniques outlined in this book. Nothing in this book is intended to replace common sense or legal accounting, or professional advice and is meant only to inform. By reading this document, the reader agrees that under no circumstances is the author responsible for any losses, direct or indirect, which are incurred as a result of the use of information contained within this document, including, but not limited to, errors, omissions, or inaccuracies.

Table of Contents

Introduction

Real estate is a tangible investment that you can see and feel, and because of his physical nature, its a more secured investment compared to others, where you can easily be defrauded.

Investing in rental real estate does not have to be a fulltime activity and you can do it in your free time. Anyway, you may come to enjoy it so much that you want to do it full time, but it is not necessary. In other words, you do not have to quit your day job to give real estate investing a try. You can learn and invest with the time you have available. You can physically run background checks, inspect the property, ensure the physical property actually exists, and see physical documentation before you commit your money.

Real estate is a people necessity and properties are available in various types, from single family homes, to duplexes, condos, townhomes, apartments, co-ops, and much more. Real estate, unlike many other businesses and investments, provides something that absolutely everyone needs.

With other investments like stocks, you are only left with the option of trusting the investment broker. It is relatively less risky and easier to understand real estate investing than other non-tangible investment vehicles. You can safely leverage real estate for debts, more so than some other investments vehicles.

Investing money into a property is a business and for it to be successful and lucrative, there is a need to have knowledge of what the upside of real estate investing can be as well as the downside.

This book will answer all your questions on RENTAL PROPERTY INVESTING.

Chapter 1

Real Estate Investment

What are the first steps that are you need to take before you make a real estate deal? Evaluate your personal finances. Nothing can happen, nothing can be purchased without finances being in place.

Even if you only have enough for a deposit on one property and plant for any repairs or renovation if needed, you need to know how this investment is going to fit into your personal finances.

You need to prepare a personal income statement outlining your finances. Understand what income you have, subtracting all the necessary essentials needed to live, debts and savings all calculated to give you a clear picture as to what finances you have to capitalize in a property, as well as monies set aside for maintenance and repairs. The financial statement will give you a total picture of what you have for your investment capital.

Is it enough to pay for your investment in cash? If so, you can avoid monthly mortgage payments and interest on the loan. Also, realize that in order to endow in real estate using a lender, many want at least 20% down on a real estate investment.

Now comes the decision making - how much should you invest? The answer is within the capital you have, the budget you will be comfortable with and mathematics. Again, even if you have enough for one property investment, it is key to know exactly what you can do when investing, so you don't get into any financial difficulties.

As stated earlier, banks treat real estate investments differently than when you purchase a property for your personal use.

A second plan has to be created, one that will define how much you can invest.

Planning for the Investment. The plan guides you through the financial steps you need to follow to prepare the investment. Now, you've decided on how much capital can be invested in a property. The plan you will create should outline the steps to take and monies shown included in this plan:

If you are going to finance the property, getting pre-qualified for a loan and having at least 20% as a down payment of the purchase price will save you time when you are out looking at properties. The competition is fierce, and if you have your funding in place, you can make an immediate offer on a property.

Property and Liability Insurance

Property Taxes

Inspection and appraisal costs (if you are financing the purchase through a lender)

Closing costs, accountant fees, attorney fees, property management service fees.

Costs of permits needed to do renovations if needed before the property is ready for renting. It is important to have the property up to code and avoid fines that can be imposed by the local municipality.

Pre-rental repair costs

Funds for any future repairs - post rental

There are different elements that comprise the first steps to invest in real estate. They are done at the same time. All the costs are subject to a) how much you will be investing and b) once that is decided, and you find your property, costs are based on what you offer as a purchase price. If it is appropriate, then you will find out what the costs for property and liability insurance, property taxes (this information is usually found in the listing) closing costs, and any fees for an attorney if necessary, permits for repairs, and the pre and post repair costs.

More about costs - An inspection of a property prior to the closing is mandatory if the sale is funded by a lender. The cost of an inspection is usually priced on average run about $278-$389 nationally.

Condos and smaller homes under 1,000 square feet can be as little as $200. Larger homes approximately 2,000 square feet will cost approximately $400 or more. These costs are an estimate and maybe more in some of the major cities.

Dependent on your location in the United States, there are additional inspections, such as for mold, radon, termites can impact the inspection. If there are any problems that arise in the inspection, it is usually incumbent on the seller to address the problem.