There are a few things you can do now to set yourself up for success in real estate investing. Here’s what we recommend.
Looking to Buy? Search All Homes
Looking to Sell? Get a Home Value Report
Today we’re going to give you some advice on how to prepare financially for your first real estate investment. This is such an important topic to me because it’s exactly how I started with real estate investing. I bought a duplex when I was 27, lived in one side, and rented the other. Here are a few things you’ll need to think about upfront:
1. Credit. You have to have a great credit score. You can keep your score up by paying off your bills, keeping an eye on things, and taking care of little things like parking tickets and utility payments. You can also reach out to a mortgage broker and have them take a look. When it comes down to it, your debt-to-income ratio is really important as well.
2. Down payment. You’re going to need one, whether it’s 3.5%, 10%, or 20%. Any down payment below 20% will result in you having to pay for mortgage insurance.
3. Home improvement funds. Maybe the home needs a new roof, or you want to remodel the kitchen so you can charge more in rent. These are the types of things you should discuss with your real estate professional.
Investing in a duplex or triplex like I did is a great way to start out. You can live in one of the units, then use the income from the other units to qualify for a higher borrowing amount (and pay your mortgage.) As the home appreciates and grows in value, this results in making more off of your investment.
If you have any questions about getting into your first investment property and you want to know more, please reach out and give me a call or send me an email. I want to get you on the right path right away to find the best possible property for your real estate investment journey. We look forward to hearing from you soon.