Buying your first investment property may seem frightening, but if you follow our advice, you should be able to find, purchase, and create an investment that provides additional income for you and your family. In our latest blog, we present 5 steps to buying your first investment property in New Orleans or the surrounding areas!
Andrew Carnegie once stated that “90% of all millionaires become so through owning real estate.” Times may have changed since the 1830’s when Mr. Carnegie said it, but the statement still stands today. Owning investment property is an awesome way to make money, but you must be wise about where you put your money.
Never dive in and purchase the first property you find. Look at plenty of properties and truly get a view of what’s out there. Educate yourself about real estate trends, the local market, and what’s happening with other properties and investors in the area. When buying your first investment property, the more you learn, the better off you’ll be.
Location, Location, Location
The location is just as important as the property itself. Depending on its location, the same house will make different rents. Fully understand the area you want to invest in. How fast is the area growing? Are rents rising faster there than in other parts of the state? There’s no such thing as knowing “too much,” so spend as much time as possible learning about what is going on around you. To find the best property for your needs, you should look at as many properties as possible.
You should look at a property the same way you choose a neighborhood based on market statistics. It’s not about what you would want to live in, but rather the property that has the greatest potential for high returns. A simple formula to use to determine if a property is a good investment is the 1% rule. This states that 1% of the property’s value should be brought in each month. If a property costs $150,000, you should plan to collect at least $1,500 monthly in rent for the home.
Be Mindful of Your Math
Naturally, your calculations need to go much further than the 1% rule stated above. Run a full cash-flow analysis to determine if a New Orleans property will be a good investment. Figuring out your exact ROI can be a difficult process. Determining a “good” ROI percentage can also be difficult, as it differs between markets and property types. Many investors aim for at least a 10% return, but this can vary depending on your situation.
Network & Grow
You will get the best advice from people who have been in your shoes. Local market experts and real estate advisors can assist you in making wise choices when purchasing your first investment property. Network with seasoned investors through local groups, both in person and online. Never stop learning, and you will increase your opportunities greatly.
Are you ready to purchase your first investment property in New Orleans? We can help! Send us a message with your selling goals, or give our team a call now! (504) 224-9066