There are many reasons to invest in real estate, regardless if you are a first-time investor or not. In real estate, investors have full control of their cash flow depending on their real estate strategy. Real estate may it be a luxury home or low-cost housing is guaranteed for appreciation.
Here are some ways to grow your investment:
1. Have it rented
2. Flip it and have a few renovations to increase its value.
3. Wait for the best market condition and sell your home for the best price.
Real estate values tend to increase over time as well as rent which can lead to a higher cash flow. With real estate, there is no place to go but up. Having real estate as one of your investments will keep you assured that whatever happens to the economy, your real estate investment won’t be highly affected since real estate investments are one the safest and usually unharmed investments there is. There might come a time that the appreciation for your investment slows down, depending on the current economic state, but definitely, it won’t last long and eventually be seen on the rise again. This is because real estate investments are tangible assets, giving you a lot of options to go about them when the time comes to let go of them.
So why don’t more people invest in properties, given the advantages of real estate investing?
It is because qualifying for an investment property loan is not always easy, and most would-be investors are unable to scale the process. The requirements for obtaining an investment property loan differ significantly from the requirements for getting a primary mortgage.
Even if an investor lives in their own home, it is no guarantee that they will be able to get the rental property loan. Banks view rental property mortgage as a secondary mortgage – an addition to the investor’s first mortgage. By taking a second loan, the investor takes on additional financial burdens that make the possibility of defaulting on both loans much higher. So make sure that you keep a good credit score, low debt-income ratio, proof of your income and if possible a bigger downpayment.
How much is the downpayment for Investment properties?
For investment property loans, the minimum down payment is between 20% and 40%, depending on the type of property.
VBRO and Airbnb Rental Opportunities
Whether you are in a tourist area or popular travel destination or just simply need help paying your bills you have an option to rent your home on Airbnb or VRBO. But it is important to understand the laws that apply to short-term rentals. But first, how do you know whether you can rent out your property?
Here are some things you need to consider:
1. City and state laws and regulations.
2. Homeowner’s association rules.
If you live in a condo, planned community, co-op, or other property with a homeowner’s association or board, you’re probably subject to bylaws; rules; or conditions, covenants, and restrictions.
3. Lease restrictions.
Renting on Airbnb and VRBO can be a great source of extra income, but be sure you know what laws and restrictions apply to you.