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Lonestar Realty
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Rental Property Investment: What You Need To Know

Rental properties for investment purposes usually comprise of commercial spaces, office buildings, and residential housing properties. The key to choosing a rental property that will generate profits is to make the right choice based on careful assessment and knowledge about rules and regulations pertaining to real estate. It is advisable to consult a real estate professional before investing in order to make informed decisions and minimize financial risks.

Important things that every investor should know before investing in a rental property are:

  • Understand The Market: Start with exploring the rental market of the area you are interested in by consulting different real estate agents and locals. Information about property values, average rents, suburb reports, and demographics will provide an insight into the current market conditions.
  • Property Tax and Laws: Knowledge about property tax and laws helps to gain an understanding of their impact on profits earned from an investment property. Consult a real estate agent to gain insight into the laws of your state.
  • The Right Mortgage: Consider different financing options and compare interests (fixed and variable), tax benefits, accounting costs, etc. A financial advisor’s advice regarding the best mortgage for the purchase is invaluable as he will help to structure the loan in a way that reduces costs and maximizes benefits.
  • Budgeting For Maintenance: A budget for regular maintenance should be drafted in order to cater to unexpected repairs and expenses and to keep the property in its appropriate condition. Look for a licensed property manager to manage the property and for meaningful advice on your responsibilities, rights, and property law.
  • Secure Down Payment: A large down payment is usually required for approval when purchasing investment properties. An investor should be ready to pay at least 20 percent of the property’s value as a down payment.
  • Increase Its Appeal: For high-quality tenants, it is important to make a rental investment attractive. A separate budget should be drafted for improving the curb appeal of the property by painting, pressure washing, upgrading lights, interior decoration, etc.
  • The Right Property At The Right Price: When choosing a property, determine the amount of capital growth (increase in value) expected from it. Some tips for choosing the right property in this context are to opt for a property in familiar locations, calculate its real value, tax deductions and expected cash flow, consider the demographic of renters, class of residential property (houses, home units and land) and the age and condition of the rental property.

Lone Star Realty & Property Management, Inc. offers a wide range of properties for investment. The agents assist the customers in finding suitable investment properties. For more details on things to know about rental property investment, visit 1020 West Jasper Drive, Killeen, TX – 76542. You can also call at (254) 699 – 7003. 

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