Tampa investors know that buying real estate is an excellent way to earn short term cash flow as well as long term ROI. If you’re new to real estate investing, make sure you educate yourself on the best practices, and spend some time talking to experts who can help you make smart choices.
More importantly, make sure you’re financially ready to invest in a Tampa rental property.
Understand Your Personal Financial Situation
You don’t have to be rich to invest in real estate, but you do need to understand where you are and what you need when it comes to money. Before you can buy a property, you’ll need to make the case to lenders that you’re an acceptable credit risk. Make sure you know your credit score, and look at your credit report to make sure it’s accurate.
Evaluate how much cash you have in reserves for a down payment and for the additional expenses that will come up once you own the property. These need to be the first things you consider.
Financing Your Investment Property
Unless you’re planning to pay for your property in cash, you’ll need to finance it. The best option is a fixed rate investor loan, which will require a down payment of at least 20 percent. Consider that when you’re looking at properties, and be sure you understand the lender guidelines before you apply for a loan.
If you’re not interested in holding the property as a Tampa landlord and instead you want to flip it, there are other lenders that might be better suited for your investment goals. These loans will be more expensive, but it’s easier to qualify for them. Contact us at Rent It Network, and we can talk to you further about hard money lenders, and provide some referrals.
Evaluate Your Investment Goals
Do your homework. What type of cap rate and return rate will you expect your investment to provide? Make sure the numbers match what you’re looking for, otherwise your investment experience will leave you feeling less than profitable. Prepare a five year plan based on what you want your investment property to do in the short term and the long term.
While you’re putting together your five year plan, remember to consider the mortgage amount and the interest rate on your loan, the cost of vacancy, maintenance expenses, and how much your property will appreciate in value.
It’s important to be prepared. Before you begin investing, make sure you understand what you’re doing and why.
If you have any questions about Tampa property management or how to invest in this area, please contact us at Rent It Network.