Is An Income Property
Right For You?
The appeal of income
properties and the potential for what may seem like easy money and early
retirement have likely crossed the mind of anyone who has heard of this
business venture. There is a lot more to
consider before entering the income property game, however, than simply
purchasing a property and watching the dollars roll in. Here are a few things to consider before
launching into your new career.
Can You Recognize An
Income Property When You See It?
There are a lot of
features that make a good income property.
Whether you are considering flipping it for a profit or renting it out
to potential tenants, knowing what to look for is more than half the job. Can you realistically estimate what the cost
of renovations to the property will be?
Do you know what the value of the home will be after the renovations,
based on its size, location, etc.? Do
you know what the market rent would be for the property? If you can't answer any of these questions
you either have a lot of work to do, or you may want to reconsider.
Not Scared Off?
So you think you can
reasonably identify an income property and are still interested in making your
first purchase. Here are a few tips for
making that a success!
Know Your Intent-Whether
it's flipping or renting the property, you should have a clear picture before
you make the purchase. Have an estimate
of what the renovations will cost as well as the profit margin of the
investment, both in the short and long term.
Consider Splitting The
Costs-Many people who enter the income property market reduce the risk by
having partners. Whether it's a friend,
relative, or business partner, this may be the right decision to minimize your
risk in your first venture.
Make It Your
Business-Whether you plan on doing this as an additional source of income or
you are going into it full time, realizing that this is now a business will
prevent you from losing a fortune. You
will spend a lot of time getting to know both the real estate and the home
renovation industries, and the more you know, the more successful you will be.
Deciding to get into the
income property business can be a time consuming, but ultimately very
rewarding, venture. Like any business,
the effort you put in and the knowledge you have will determine the success you
achieve.
