Before You Dabble in Investment Property, Here’s What You Need to Know

That last vacation you took when you rented a house as opposed to the pricier hotels and condos? That was an investment property, and although you probably saved some money, the bill you received might have gotten you thinking about dabbling in investment property yourself. It’s a great avenue to explore if you’re in a secure financial situation, so here’s what you need to know in order to make a smart, successful investment.

Calculate Some Numbers

An investment property generates income, but it’s a slow process, so don’t blow your budget thinking you’ll earn it back instantly. You need to calculate some numbers, but don’t worry — it’s simple and follows an equation. First, you need to know how long it will take your property to pay for itself, so calculate the gross rent multiplier (GRM) by dividing the market value of the home by the estimated gross annual income. To find that annual income, calculate the monthly rent using the 1 percent rule. In an ideal scenario, the monthly rental income should be at least 1 percent of the amount you paid for the investment property. However, if your home needs a lot of work, you might want to follow the 2 percent rule. These are just a few of the basic calculations, and they are meant to be more of a guideline, but you can crunch some serious numbers using an online investment calculator.

Decide on Your Financing Route Early

Unfortunately, mortgage insurance isn’t an option with an investment property, so you’ll need to come up with a decent down payment (at least 20 percent). Plus, you’ll need to have a good credit score (at least 740), as anything lower could mean a higher interest rate. Banks will typically want to see that you have at least half a year’s worth of reserves on hand in the bank to pay expenses related to your rental property. Considering these factors, you might be wondering how you’re going to pull this off, but there are several financing options for you to look into, such as a mortgage loan, home equity loan, or a partnership.

Location Is Important

Don’t let all this talk about numbers keep you from taking into account another significant factor in an investment property’s success: the location. A high cash flow is tempting, but remind yourself that this will change over time. As Bigger Pockets explains, a property in a less-than-desirable location tends to experience huge changes in value, “and these investments typically become a race against time to recover fully before the next down cycle arrives.”

When you’re looking at investment properties in Los Angeles, all the options available can make it a little overwhelming. Which location is best? That all depends on what you think your renters want to see. As Turnkey points out, if beachfront views are your draw, then the only issue you’ll have is deciding which beach to choose whether it’s Santa Monica, Long Beach, or Venice Beach. Perhaps you’d like a property close to the action in Central LA, or maybe you would prefer to offer renters a quiet escape in the San Fernando Valley.

Make the Necessary Updates

If you’re not able to overlook the dated appliances and gaudy wallpaper, your tenants won’t either. Make upgrades so that you can please tenants, justify your rental rate, increase your property value, and bring in good reviews. You don’t have to do any serious demolition; paint the walls, upgrade appliances, pull out carpet, put up a new front door, and add landscaping. Safety should be a priority as well, so invest in some smart home technology such as security systems, locks, smoke alarms, and doorbells to not only give your tenants peace of mind, but you as well.

Investment property is a new avenue in the real estate world. If you want to explore it, start with the numbers first before you get into the details. Should your finances and calculations point to a sound investment, call your local realtor to get the ball moving.

4 Moves That Can Raise The Profits on Your First Investment Property

Are you a first-time real estate investor looking for tips on finding and managing the perfect property? Then you’ve come to the right place! There are a few essential steps real estate investors need to take in order to guarantee returns on their investments. This guide has put together some helpful information on what those steps are.

Investing in Experienced Property Management 

Since this is your very first investment property, you don’t want to take any risks that could reduce your return on investment (ROI). So instead of attempting to manage your rental on your own, let experienced pros take care of all that management stress and hassle for you. For example, if you invest in a Miami vacation rental, connecting with a management agency will make finding those first renters so much easier. A property manager can provide you with 24/7 local support, professional cleanings, and access to up-to-date booking info, so you will always know when your property is unoccupied and who is renting your home. Hiring a property management company, instead of self-managing investment properties, is critical for investors who lack the experience needed to attract reliable tenants, collect rent, and coordinate timely maintenance. Plus, investing in a property manager, can help reduce stress for new landlords. 

Estimating All Potential Investment Expenses 

Property management costs are not the only long-term expenses you need to anticipate. While a property manager can ensure that the rental’s maintenance and repairs are completed, you will still need to cover the additional costs associated with these jobs. How much those repairs cost will depend on whether you have contractors complete the repairs or take care of some of the repairs on your own. Creating a home maintenance fund will prevent your finances from being thrown off track by any surprise costs. Aim to set aside around one percent of the total home value in this savings account, and keep in mind that you will need to do this for each property you own, including your personal home. Another additional cost to plan for are any premiums related to investment property insurance, which you will need to fully protect your property. 

Weighing Financing Options for Investment Properties 

Figuring out a plan to cover routine costs associated with a new investment property can help you protect your ROI, but you also need to be aware of any potential upfront costs. Acquiring financing for investment properties, for instance, tends to come with more initial expense and more restrictions than securing a mortgage on a primary residence. You will likely need to put down anywhere from 20-40% in order to be approved for a loan, plus interest rates and lending fees tend to be more costly. If you have multiple mortgages or less than perfect credit, you may also need to prepare to have six months’ worth of payment held as liquid capital. Or, you may need to pay down some debt before you can take out a loan for your investment property. So keep these potential costs and requirements in mind as you budget for your investment. 

Researching Popular Locations and Profitable Properties

After you’ve completed the necessary financial planning and have a good idea of how much you can afford to pay for your investment property, you’re ready to begin your search. Start by narrowing down your choices when it comes to prime locations. Miami consistently earns a spot on this list with reasonable home prices for first-time investors and a constant flow of tourists and transplants looking to rent properties. With a city in mind, you will want to start researching popular rental neighborhoods, such as Brickell and Edgewater in Miami, so that finding renters will be less of an effort for you or your property manager. If you opt for a vacation rental instead of a long-term rental, you should look for homes near tourists hotspots to boost your ROI. 

Whether you invest in a vacation rental or a residential property, you want to have all of the help and expertise you need to make that investment worthwhile. So, keep this article handy to guide you through the process of investing in your first rental property. 

The Grove Resort & Spa Orlando Vacation Rentals Investment Opportunity

The Grove Resort & Water Park is more than a vacation home resort. 
It’s a place where fun happens, and memories are made.

Large, Fully Furnished 2 & 3 Bedroom luxury vacation homes are
available from the $300s. Exclusive Sales (305) 788-9393.

Located Just 5 Minutes from Walt Disney World®

The Grove Resort & Water Park, Orlando’s newest luxury vacation home community offers owners privacy and convenience with a full suite of amenities including multiple bars and restaurants, full service spa, water park, breathtaking 20-acre activity lake, and much more. Located just 5 minutes from Walt Disney World, ownership of one of our large 2 or 3 bedroom condominiums provides a family friendly place to vacation and relax. When you’re not using your condominium, place it into the professionally managed turnkey hotel rental program to help offset costs. The Grove Resort provides hassle free vacations, and stress-free property ownership.

Experience the Fun – World Class Amenities!

Orlando’s newest vacation home resort offers the best amenity package in Orlando! Spend the day in the sun at the Surfari Water Park, complete with water slides, lazy river, kid’s aquatic jungle, private cabanas and more. Hungry? We got you covered! Enjoy a sit-down meal or a poolside snack at one of the multiple onsite restaurants, or a cocktail at Elements Bar & Lounge. There’s even a full service onsite spa. The Grove is the perfect place to take a day off from the theme parks, saving you money and creating memories to last a lifetime!

Surfari Water Park

Surfari, your very own on-site water park, offers something for everyone. Ride the lazy river, catch a wave (or two!) on our Flow Rider surf machines, take the plunge off our dueling two-story water slides, or just relax and soak up the sun in the expansive zero-entry pool. For our smaller guests, hours of fun await at the kid’s pool and play area. Our private poolside cabanas are the perfect place to cool off and treat yourself to a relaxing massage. Afterward, drop by Longboard Bar & Grill for burgers, BBQ, and a craft beer or cocktail. The Surfari Water Park is the perfect place to take a day off from the theme parks!

Why The Grove Resort & Spa Orlando and Not Another Investment Opportunity?

Not all investment opportunities are created equal! Call (305) 788-9393 to find out more.

Take A Tour Of The Grove Resort & Spa Orlando

Exception opportunity to own income-producing real estate in Orlando, Florida

Additional information please call (305) 788-9393 to schedule your stay and tour of the property.

The Grove Resort & Spa Orlando. Exclusive sales by Brosda and Bentley Realtors (305) 788-9393

Airbnb-Friendly Condo/Hotel Natiivo Miami Investment Opportunity

Airbnb-Friendly CondoHotel Natiivo Miami Investment Opportunity by Brosda & Bentley Realtors
Airbnb-Friendly CondoHotel Natiivo Miami Investment Opportunity by Brosda & Bentley Realtors

The Natiivo Miami project, with 604 units, is expected to open in mid-2022/ early 2023, with pre-construction prices starting at $300,000.

Call ☎️ + 1 (305) 788-9393 for more information and pre-construction investment opportunities.

PROJECT FACTS:

  • Architect: Arquitectonica
  • Interior Design: Urban Robot
  • Landscape Architect: Urban Robot
  • Project by: Newguard
  • Estimated Completion: 2023
  • Site Address: 159 NE 6th Street Miami, FL 33132

OVERVIEW:

Studio, 1, 2, 3, 4-Bedrooms Units / 410 SF –2,200 SF

Prices from the mid $300s to $1.2M

BUILDING AMENITIES:

55,000 SF of building amenities including:

  • Exotic resort pool with pool-side cabanas 
  • Bar and Grill on pool deck 
  • 24/7 co-working lounge
  • Private meeting rooms and event room with exclusive terrace 
  • Fully equipped, state-of-the-art fitness center with HD TVs and wireless audio Private Peloton studios Yoga lounge and terrace

RESIDENCE FEATURES:

  • Urban luxury residences with modern open layouts from 410 to 2,200 SF 
  • Studio, one, two, three, and four-bedroom units 
  • All residences are delivered fully finishedand furnished with fixtures and furniture curated by Urban Robot 
  • Panoramic ocean, Biscayne Bay, and Miami skyline views 
  • Private balconies accessible from living rooms and master bedrooms 
  • Corner units offer wrap-around balconiesHigh ceilings ranging from 9’ to 11’ 
  • Owner closets in every residence Floor to ceiling sliding glass doors and sound attenuating impact-resistant laminated glass though-out