Your First Investment
Your first real estate investment should always be your own home. If you are paying rent, it doesn’t really make a lot of sense to invest in real estate. Save money and use it for yourself and purchase your first real estate investment. The house doesn’t have to be perfect, it should simply suit your needs. Keep in mind that people will still be living in it, which means that you should make it livable, but you don’t have to go overboard.
Proper Financial Management
It’s okay if you don’t have the cash to pay for your Milwaukee real estate investment this exact moment. What you should do is work on getting your finances in order so you can save up for a down payment and apply for a loan. There are a lot of assistance programs that can help you with your first investment loan, while also helping you get the lowest down payment possible. When you get qualified and have the down payment, the only thing that’s left is to find the right property for your portfolio.
It is important to do research on your first and successive Milwaukee real estate investments. Make sure the neighborhood is in demand; this will help you find renters when you’re ready. Check out the schools, entertainment, access to shopping and groceries. You will want to make sure you choose an investment that would work for multiple family types. This will give you the best chance to find a good renter in the future.
Also, check into each available property. Check that the taxes are paid, check the zoning, verify if the property is in a property owners association, this will cost you over time and eat into your rental profits. Make sure you conduct an inspection of the house you are interested in, most lenders will require this anyway. You want to make sure you pick a house with a good structure, a comfortable floor plan, and some curb appeal.
Begin Investment Cycle
When you have purchased your first house and moved in, you must keep on top of your payments and find ways to make extra money so you can pay off your house as fast as you can. Hint: The more principal you pay on top of your payments, the faster the loan and the interest rate will decrease. When you’ve payed off your home, it’s time to go and find your next investment!
Buying Your Second Investment
Now that you are only paying homeowner’s insurance and utilities, you will have a lot more money to save up for your next down payment. You will not qualify for the same first time home buyers loan, so you will have to come up with at least 20% of the purchase price of your next investment. Once you have the down payment and are qualified for the loan, you can research and purchase your next investment. You can now rent that home, or move into it, depending on how you feel about your first home. Make sure you charge enough rent to cover the payments and continue to pay off large chunks of the loan principal. And this is how anyone can get started with Milwaukee real estate investment. You get to the point where your rental income pays for the investment. Save up more money for the next downpayment, become qualified for the loan, purchase the next one, and so on and so on. Now you have a portfolio of homes that are paying for themselves, and you will have residual income.