Rent rates in Southern California are hitting record highs. New investors need to focus on Southern California’s fixer-uppers, especially to try and lure buyers with flips or find a median priced home that could fetch a better rent. As a beginner in real estate in real estate you will require a few tips that will help you succeed.
Consider the returns on renting the property
As an investor in real estate, you need to do the math. Calculate the amount you will be receiving in rent from the investment over the duration of time. Remember that brokers might quote a figure that is too high in a bid to entice you to invest in real estate. It is good that you consider the real rent of that area by reviewing the rent of similar house for rent in the same area.
Examine the cost of buying the house
Calculate and determine how much it cost you if you would purchase the home. Most people in most markets think of taxes, water, mortgage, sewer and insurance to be the responsibility of tenants. Avoid relying on estimates. It is wise to use real figures by talking to experts in tax bills, insurance rates, and water bills.
Find a real estate guru for mentorship
Mike Cantu of Upland, Ca. has more than 30 years’ experience as a full-time real estate investor. Cantu manages the portfolio for rental houses and he also operates a buy and sell venture. Other real estate gurus in that area are Robert Fragoso, the executive vice president of Anchor Loans in Orange County, Than Merrill of FortuneBuilders, and Brice Norris of the Norris Group in Riverside California.
Reasonable vacancy rate
Brokers will always entice people to buy houses for real estate investment. They will assure investors that their houses will forever be occupants and that they will never be vacant. As a wise real estate in Southern California, you need to get the real vacancy rate impute and not just trusting the opinion of brokers that the house will never be vacant.
Management of the property
Think about getting an expert who will be in charge of the management of your real estate. An investor must also take into account the fees or charges incurred in managing the property. Consult other investors who have similar properties to find out the reasonable reserve for maintenance and to carry out the repair. Having considered all the above factors, do the math to determine if you will be making profits or running into losses.