So you’re thinking about becoming a Twin Cities residential investor and/or becoming a landlord! Minneapolis Property Investments are building value for many a personal portfolio.
helps Residential Real Estate Investors.
Home Destination helps individaluals seeking to buy properties in the Twin Cities to gain an understanding of what is a good residential real estate investment.
Do you assume that you can't afford to buy a house? You may be surprised to find that you may well qualify. Find out by seeking to pre-qualify. One benefit of this Great Recession and titanic tanking of the real-estate market, some amazingly cheap property is up for sale. If you're willing to relocate, and to put in a lot of sweat equity, residential investors can buy a home for as little as $30,000 in the Minneapolis real estate market. At late October's national average 30-year fixed mortgage rate of 3.94%, a full loan on a $30,000 home would amount to just $173.44 per month. Now that's a far cry better than renting. Read more details on a recent realestate.msn.com posting.
Residential real estate; is it a good investment for you...?
Many people believe it is a good place for their money and it can be. Economists say that these residential investors could help stabilize home prices. “If you have a lot of foreclosures in one community you will improve everybody’s home property values if you take them off the market,” said the Washington Post quoting Mesirow Financial. “If those homes are renovated and even rented, it is a lot better than having them stand empty.” Today’s market offers low prices, good inventory, and more demand for rentals with people who have experienced a short sale or foreclosure. However there are many things to consider prior to making this decision.
How To Get Started As A Twin Cities Residential Investor
Buying Twin Cities residential homes can be an effective and time-honored means of earning additional income. However, investment buyers are learning just how much work they should expect to put into it. Minneapolis real estate investors take the time to gain an understanding of how to make it a profitable experience and successful venture.
Minneapolis Property Investments
Begin the venture with your eyes wide open to your local housing market and it rental prices, rental home availability, rental demand, and tenant pool demographics. Start with a working knowledge of the following key factors:
* The return on investment you want to have, the property's costs and expenses, and the financial risks of owning the property.
For example, if you own a duplex and your goal is to earn $20,000 a year in rental income and the property requires a $4,000 monthly mortgage plus an additional $650 a month in taxes and other expenses, you'd have to charge around $6,400 in rent monthly to attain a profit margin.
* First, be certain that there is a market for the proper you intend to purchase. How will you gain a responsible tenant? Will your tenant take reasonable care of your property while living in it? If not, you may face a sizable chunk missing from the investment income you are seeking. Minneapolis real estate investors have the advantage of catching frequent seminars available across the Twin Cities. Follow our blog for news announcements.
* When making an residential investment purchase, plan to own the home for many years. As the owner, plan sufficient funds for routine repairs, home maintenance and improvement projects. Owning a property for 20 years or more will likely mean that a kitchen remodel may be in store. Replacement water heater and the HVAC unit, or a new roof and siding job should be factored in. If you own a home for five years, your most likely repair costs consist of upgrades that help the house sell at a higher cost. Owning a rental property for a shorter amount of time may well become a high risk proposition; costing the investor more than it time can give back * Dig into rental property statistics by researching home prices and average rental rates in the real estate neighbor where you plan to buy a home. Additional key variables for a residential investor include the property's location, size, move-in condition, curb appeal and amenities that will attract a quality renter. Purchasing a rental property is different than a primary residence. Think about what features hold the greatest appeal for your desired tenant profile. Renters will be considering the home's proximity to jobs, shopping, medical care, and schools.
Minneapolis Property Investments
Do your due diligence to understand the numbers.
Research the market you want to be in.
Wait for the right opportunity.
Watch your costs.
Residential Investors Seeking Profit Margin
Residential investors often ask, "how long will it take for the property to produce a positive cash flow?" Many times your property may not have a profit margin and you will be doing the work yourself. Arrange a professional team including an attorney, accountant,insurance agent, loan officer and Realtor who know the industry. You will need cash up front to purchase of at least 20% down payment. This is true for one to four unit properties. Rental properties require a significant down payment and the terms for the mortgage are more stringent than single family homes. Begin small as there is a learning curve. Start with a single home to understand and experience whether this is for you. Here are some questions to ask yourself before you begin the process:
Do you have the ability and time to find tenants or complete renovation and repairs when needed?
Would a management company be a better option for you
If a management company were to be used, what would be the expenses involved?
Investment questions to ask prior to purchase:
Make sure you have answers to all your questions before you become a residential investor. Once you have agreed to hire CDPE Jenna Thuening, she will research properties within your interests and determine the answers as you move forward. Home Destination has successfully help many Minneapolis real estate investors gain key assets by taking advantage of the many buying opportunities through foreclosures and short sales. With your personal specifics at hand, you will gain the following answers:
Does the property cash flow?
What is the monthly cash flow?
What is my return on the property?
How will write off’s impact my return?
How much principal can I reduce?
What is the cost of my mortgage?
What is the rate of return or cash on cash return?
Cash on cash Annual Dollar Income
Return+ Total Dollar Investment
Residential Investor Resources
Read what HUD is saying about the HOME Investment Partnerships Program and affordable housing. For buyers considering rental investment options, contact Jenna Thuening for help to answer your specific investment questions. Residential investors who become landlords can use free software from the federal Environmental Protection Agency called Portfolio Manager to enter information about the fuel use, heating, and electricity of their rental properties. But it's not clear that software like Portfolio Manager will lead quickly to the adoption of practices that can help Minneapolis real estate investors smoothly shed energy costs.
Creating and Growing Real Estate Wealth: The 4 Stages to a Lifetime of Success
Whether you are a seasoned real estate residential investor or just getting started, you will benefit from reading a great new book titled Creating and Growing Real Estate Wealth: The 4 Stages to a Lifetime of Success by William J. Poorvu. Real estate businesses that succeed determine what methodologies have boosted the sober, successful residential investors who are in it for the long run. In an era of speculation and dice rolling that often results in unsatisfactory results, it is an inspiring and highly valuable read.