Are you buying your first Albuquerque investment property?
This is an exciting – and probably an overwhelming – time to buy a rental home. In our market, you have some diverse options in promising neighborhoods. There are single-family new-construction homes in HOA neighborhoods. You can look at older homes with a lot of potential for higher rents after a few cosmetic updates. There are multi-family units and small apartment buildings.
What will you buy, and how will you reach your investment goals?
Before you start making offers, consider these 5 key points that must be a part of your strategy when buying your first Albuquerque investment property.
1. Decide on How You’ll Finance the Investment
You’ll need money.
The way you structure the purchase of your investment property will impact how much you’re spending now and what you’re able to earn later.
You don’t have to be a real estate investor to understand the impact rising interest rates have had on the market. It’s more expensive to borrow money now, and that means if you take out a mortgage to invest in a rental property, you’re looking at extra expenses. But, you’re also leveraging borrowed funds to increase your ROI in the long term.
Pay in cash or figure out a plan for financing. This will depend on where you are financially, and it’s one of the first decisions you’ll have to make when investing for the first time.
2. Identify Property Management Services in Albuquerque
You’ll need an Albuquerque property manager before you can invest in your first rental property. You might think this isn’t necessary until you’ve already purchased the property and you’re ready to rent it out.
Accessing the resources and expertise of a property manager before you buy can make a big difference in the success of your first investment. A property manager will estimate how much rent you can bring in, recommend improvements and upgrades, talk about the types of maintenance your home may need, and identify the typical tenants who would be most interested in your property.
3. Choose the Right Albuquerque Investment Property
You’re not house hunting for yourself. This isn’t a home you’ll live in.
Approach your investment from a business standpoint. You don’t need to find a property that you love. You need to find a property that will make you money.
Avoid fixer-uppers when you can. Those run-down homes seem like great investments because they don’t cost as much as the properties in better condition. However, as a first-time investor, your goal is to get your investment property onto the market as soon as possible so you can start collecting rent. Rehab and renovations will take months, and that will delay your income and earning potential. Look for an investment with only cosmetic updates needed.
4. Location Matters
Location will always be one of your most important selling points, even when you’re renting out a home. Think about this before you invest. If you find yourself trying to rent out a property in a neighborhood that tenants won’t notice or want to live in, you’re looking at some long vacancies and reduced rental rates. Target locations with good schools and proximity to shops, restaurants, and entertainment.
5. Pay Attention to Your Investment Goals
To be a successful investor, you need to know why you’re investing and what you’re hoping to accomplish. Your investment goals will help you make smart decisions. They will drive what neighborhoods you focus on, whether you choose single-family homes or multi-family properties, and the way you structure financing.
Get those goals in writing and use them as your guideposts.
These five considerations will set you up for success as you prepare to invest. If you’d like some help, please contact us at Bruni Karr Agency.