Rental Property Investing for Beginners

) Cash-on-Cash Return- This is the ratio of annual cash flow (before tax) to the net amount of cash that you have invested. It measures the returns made by the investor annually on the property in relation to the amount of mortgage that the investor paid during that particular year.
2) Capitalization Rate/ Cap Rate- This rate is the ratio of the net operating income generated by a property to the original cost price or the current market value of the property. It is used to compare different real estate investments with each other.

Now here’s a list of documentations you must own to apply for a loan,
The application form for the loan provided by the lender.
The purchase agreement and a copy of all agreements and negotiations made between you and the lender.
Your financial statement stating your assets (personal or commercial) and income statement from all your current income sources.
Your personal as well as business tax returns (of at least two preceding years)
Insurance for the rental property and details of the property you are willing to invest in.

ome Equity Loan (HELOC) - This is a mini version of conventional loans and can also be called your "Property Credit Card." In this, you get yourself a loan with your existing property as collateral. This type of loan usually allows you to borrow up to 80% of your existing property's worth; sometimes, it also goes up to a solid 90%, excluding the amount you already owe the bank/lender from your loan on your previous property.

“Don’t wait to buy real

al estate, buy real estate and wait.” ― Robert G. Allen

We're going to price our property either lower or the same as the location's average property rental price. This is because the properties that cost equal or less than the average cost tend to be a lot more affordable for the tenants. So go for properties that have average cost price (so

It must be well-maintained, not require many repairs, and generate revenue as soon as possible.
And finally, it should be up to date with the on-going market trends. After all, nobody likes lousy and old-fashioned properties.

SO, WHAT MAKES A GOOD RENTAL PROPERTY?
It must have the perfect location keeping all the priorities I mentioned earlier in mind.
It must be evaluated and selected to fulfill the plan you designed.

These properties are absolute gold for people who invest in HOUSE FLIPPING. But since we are rental property investors, we will go with the well-built properties that require less modification and can be rented out as soon as possible!

But which property should I go for?" Let me lay down a few facts if you are inclining towards the second category tempted by the fact that they cost a lot cheaper, recall what I said in Chapter 2, NEVER UNDERESTIMATE THE REPAIR AND MAINTENANCE EXPENSES! Yes, if you have a team of workers and property managers, go ahead and give these properties a try, but if you want the one that'll guarantee you a win, don't be afraid to spend some extra bucks. Spending time, effort, and money in improving the property's condition will end up costing you more than just some extra bills