How to determine if a property is the right investment for you.
Today I am here to talk about how to calculate the numbers for a rental property. If you’re thinking about investing in real estate, this will help you know if you should choose that property or if you should walk away. Investing in real estate is great because it can give you an excellent source of passive income. However, not all properties will do that, so you need to know how to choose the right one.
The first thing you need to do is figure out how much you can charge for rent. This is crucial because you can’t overestimate, and you don’t want to underestimate. You need to make sure that you’re being realistic and not dreaming.
“If your calculations end in a positive number, that property could be a good investment.”
The second thing you need to do is add up the expenses. Start by looking at what the mortgage is going to cost you and how much you’ll be paying in taxes. Then add together all of your operating expenses, including utilities, repairs and upkeep, landscaping, snow removal, and more. Also, think about whether or not you would want to hire a management company to run things, as that would be an added expense.
Then you can subtract your expenses from your income, and it all comes down to the math. It doesn’t come down to emotion, like loving the property’s appearance or location. You need to focus on the math, and once you do the calculations, the important thing is to see if you’d have money left over at the end of the day. If your calculations end in a positive number, that property could be a good investment.
If you have any questions or need help finding a property, feel free to call me. My team has agents that do this every day, and we’re all ready to help you make the right decision for you. I hope to hear from you soon.