At E World Holdings, we are chiefly interested in commercial real estate. However, Investing in residential real estate is a great option for secondary income. There are some tips to follow if you wish to have success with this venture.
Find the Right Location
Residential real estate investments are all about location. What should you look for in a location?,Some of the most important aspects of a location are the property taxes, the quality of the school district, low crime rates, and a prosperous job market. It’s important to find a community where your rental property will have a good chance of being accepted. The most fancy corner of town may not be it. On the other hand, it’s hard to find and keep good tenants in bad areas, where crime rates may be higher.
Do Your Research
As this is your new venture, you will need to do plenty of research! Take courses, read investment books, attend a seminar, or engage with others in the residential real estate community. Any books, courses or seminars that you can find on the topic of how to select locations, value properties and evaluating the rental market will be helpful to you.
Remember the One Percent Rule
The “one percent rule” is a general rule of thumb that people use when evaluating a rental property. If the gross monthly rent equals at least one percent of the purchase price, they’ll look further into the investment. If it doesn’t, they’ll skip over it.
Using the example of a $400,000 house and this rule of thumb, you would need to rent the home for $4,000 per month in order for it to be a good investment.
If you follow these general rules of thumbs for investing in residential real estate, you should be able to find great success!