If you’re considering real estate investment for the first time, know that this is no small undertaking. Both within rental property investment and other areas, real estate investing can be a big commitment to make.
At Americas Housing Alliance, we’re here to walk you through all the details. Here are a few big investment mistakes some first time investors make – and how you can avoid them.
Buyers will be drawn to properties for various reasons – some are into location while others love the aesthetics. Whatever your reasons for liking a property are, though, never act on such single impulses for purchasing decisions. Just because a home looks great doesn’t necessarily mean it’ll yield positive cash flow, and you need to take the time to do the research and find out whether important tangential elements are in order.
Obtaining enough cash for a purchase can be an issue for some, and in many cases, people will draw from savings or retirement accounts. We aren’t here to tell you how to manage your finances, but in general, these kinds of accounts should not be used for these purposes – they can set a bad precedent and create a slippery slope for future finances. Instead, look into whether investing with a partner for shared expenses might help with financing issues.
The IRS has guidelines for taxable income on investment properties, and before you consider a purchase, review these to see if you may be able to find lower taxation rates once rental income is generated.
Finally, ensuring that you have a professional group managing your property is absolutely vital. Not all companies who offer these services employ true experts in day-to-day management, and nearly all savvy investors in this field use reputable companies like ours to find high-level management solutions. We have experienced, professional management partners in each city in which we operate, and we recommend these to all our clients.
Want to learn more about any area of rental property investment? The experts at Americas Housing Alliance are standing by to take your call.