If you want to invest in New Orleans real estate, one of the best options would be to invest in a single-family home. But how do you know when you have found the right one? We can help you find the right New Orleans house using the 10 questions below!
Question 1: What are your long and short-term goals for the property?
People invest in real estate for different reasons. It’s imperative that you invest in properties that help you reach your goals. Do you want to make 40k in the first year? If so, and if you can handle the hard work, flipping may be better than a rental property. However, if you want a long-term, stable source of income, the rental property may be the better option.
Question 2: How much can you really afford?
When buying a house, there are more costs to consider than coming up with the down payment and monthly mortgage payment. Before investing in a property, make sure you understand what it will entail. Utilities, monthly maintenance costs, property taxes, and insurance costs may be different than what you are used to.
Question 3: Will this be your primary residence or an investment property?
Or maybe both? One strategy new investors use is to buy a home for their own use, with the intent of renting it out in a couple years. Other investors may decide to buy a multi-family property using an FHA loan. If there are four units or less, you can live in one unit while making a profit from renting out the others.
Question 4: How will you pay for the house?
Many investors buy houses in cash. It can be difficult to get a loan for an investment property. Many investors start with a small property and gradually work their way up to larger and more expensive properties. Another option is to work with a partner. This allows you to invest in a more expensive property than you would have been able to on your own.
Question 5: How much do you need to borrow?
When you know the true monthly cost of the house, factor in upgrades and repair costs. Some loans let you include repairs in the amount you borrow. If you plan to take out a loan, discuss your plans with an accountant or financial planner to make sure you can afford what you plan to do. For many people, buying a house in cash can be a safer route.
Question 6: Who will your tenants be?
An excellent way to create income and build equity is to purchase a buy-to-rent property. Think about the location and what kind of tenants are actively looking for rentals there. Always consider who would want to rent your house. Even if you aren’t renting it out right now, you may change your mind later.
Question 7: What would your cap-rate look like?
When investing in real estate, defining your cap-rate is critical. This number will help you decide if the investment is profitable. To calculate your cap-rate, divide the net operating income by the purchase price. The profits are better the higher the number is, but this usually comes with additional risk. Cap-rate isn’t the only factor to consider in investing, but it can be useful when comparing properties.
Question 8: What is the neighborhood like?
Even if it’s a great deal, many investors won’t consider a property if it’s in a bad neighborhood. Unless the area is up and coming, a bad neighborhood is too risky. You will likely not attract high-quality, long-term tenants, and you will have to worry about vacancies, low rents, and theft.
Question 9: What are your must-haves and have-nots?
Make a list of things you must have, would like, and absolutely won’t consider. Don’t compromise on what is important to you. Creating and sticking to this list will help you buy with less emotion.
Question 10: Will it likely resell easily?
Every investment needs a good strategy behind it. Can you quickly liquidate the property if needed? You don’t want to be stuck with an unwanted property if you ever need to sell.
Are you ready to buy a single-family house in New Orleans? Whether you are looking for an investment or a full-time residence, call us before calling an agent! Find out how buying direct can save you money! Send us a message or give us a call today! (504) 224-9066