I rent out my $343,000 first home to make extra cash — follow these top five tips to do it too

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Investing in a property is a great way to make some extra cash, but not everyone knows how to go about it.

Patrick Wall – who rents out his first home – has shared with The Sun tips for buying an investment property.

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Patrick Wall and his wife, Shelby with their dogcredit: Facebook / Shelby Wall

29-year-old Patrick made his first estate $343,000 in . bought in Denver, Colorado in 2018.

He opted to invest the money in a two-bedroom, two-bathroom apartment overlooking downtown Denver and the mountains.

When he originally bought the property, Patrick used the property for living, so renovations would cost less.

After renovating the property, he soon moved out in 2020 and started renting it out.

Patrick mentioned that, since renting, he’s gained a ton of knowledge from his investment property.

From maintaining the property to preparing the leases, he has done it all.

Today, he charges $2,095 per month in rent, which roughly covers his monthly $2,100 mortgage repayment.

Although he also currently breaks down on the property, Patrick would have received about $390,000 if he sold it today.

This means he would make a profit of $47,000.

Since receiving the apartment, Patrick has also purchased another property in Denver where he currently lives with his wife Shelby and their dog.

Below we round up their top tips:

1. do your research

One of Patrick’s first tips for buying an investment property is to do your research.

You shouldn’t just go in and buy the first property you see.

The best thing to do is to compare properties and prices to make sure you are getting a good deal.

2. location, location, location

The next thing you should be aware of is the location, as it is an important part of buying an investment property.

Patrick explained that “[tenants] want convenience. They want to live in nice areas that are easy to reach.”

So whether you’re buying a townhouse, residential home or condo, you’ll want to know how long it will take someone to get to everyday amenities like a grocery store, dry cleaner, and gas station.

3. Know your audience

Patrick also pointed out that older and younger people want different facilities and accommodations.

So, one must be mindful of this when you are looking at properties.

“If the area is filled with a younger demographic, that is the one you want to market the property to,” he said.

4. know your finances

Patrick also highly advised people to “run the numbers”.

You’ll want to make sure you can actually afford whatever mortgage rate you’re looking for, and that it fits how long you’re trying to hold the property.

Patrick advised not to hold a property for more than two years, if possible.

“If you do this, you will have to pay capital gains tax on it,” he said.

He also stresses making sure you’re pre-approved before you start watching.

“It will give a competitive advantage in the market,” Patrick said.

5. it takes time

Patrick’s last tip is that “things always take longer than you originally expected,” and you won’t see an immediate return on your investment.

This is something that Patrick has learned over the years.

Other ways to invest in real estate

Renting out a property is not just about investing in real estate. you can also flip a property,

Flipping is a type of real estate investment strategy in which an investor buys a property, quickly remodels it and then quickly sells it for a profit.

According to InvestopediaIn 2019, flipped homes accounted for 6.2% of all home sales in the US

However this approach can be quite risky and many people do some simple mistake I’m doing this

Also, if the market crashes, you may have to sell at a loss or be stuck with an asset you don’t want.

If you don’t have the liquidity to buy a property, you can still invest in real estate through a real estate investment trust, also known as a REIT.

It is a firm that invests in commercial property including rental blocks, malls, corporate office blocks.

Just like stocks, REITs are traded on exchanges.

But the advantage over traditional stocks is their diversified portfolio, historically high returns and favorable dividend payouts.

In addition to these tips, we also discuss Four Garden Additions That Could Add Thousands for the value of your home.

We talked to a mortgage expert about it Mistakes that could cost you a loan or a house.

Plus, we break down the states Where home prices have risen the most,

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