Are you trying to become a real estate investor in Folsom, California?
If so, you have a lot of planning to do. For example, what type of real estate investor do you want to be?
Do you want to own rental properties and become a landlord or invest in fixed-upper properties that you can flip for profit? Each option comes with pros and cons.
You also have to think about your budget, your costs, and your potential ROI.
Not sure where to start? Don't worry, we're here to help. Keep reading for everything you need to know about real estate investing.
Assess Your Budget
The first step in becoming a real estate investor is identifying how much money you can afford to invest. If you have funds set aside in savings or in a trust, decide how much you're willing to pay for a rental property or fixer-upper proper.
If you're taking out a loan, on the other hand, we recommend getting preapproved. Talk to your bank and other lending companies to determine your investment loan eligibility.
Getting preapproved will tell you exactly how much money you can take out. It will also help you budget for your monthly costs. Furthermore, a preapproved offer is more competitive than an offer pending approval.
Determine What Type of Property You Want to Buy
Once you've been preapproved, you can start shopping for your future real estate investments. Based on your budget, what type of property do you want to buy.
Investing in rental properties will help you establish a stream of passive income. A single property probably won't pay all of your bills, but you can invest in more properties over time. Eventually, you'll build incredible wealth and retire comfortably.
If you don't like the idea of being a landlord, you can buy up distressed properties, fix them up, and sell them for a profit. Fix-it and flip-it properties provide large payoffs. However, they don't carry the long-term benefits of rentals.
Calculate Your Potential ROI
Becoming a successful California real estate investor means doing your homework. Before investing in a property, find out what your potential ROI will be.
For rental properties, this means extrapolating your costs versus rental income. How long will it take you to break even on the property? Do you have to invest in any renovations before it's ready for tenants?
We recommend using property management services in Folsom to maximize your success. They can screen tenants, collect rent, conduct inspections, complete repairs, and more.
For fixer-upper investments, calculate the costs of the property, renovation costs, buying and selling costs, and taxes to understand your true ROI. How much will you walk away with when all is said and done?
Want to Become a Real Estate Investor in Folsom, California?
If you want to become the best real estate investor in Folsom, California, it's going to take some work. Follow this guide to get started on the right foot.
Look through our blog to find more helpful real estate investing advice. Contact us today to learn more about our property management services. We can also refer you to an experienced real estate agent in Folsom.