How To Create A Realistic Budget When Buying Investment Property in Orange County

How To Create A Realistic Budget When Buying Investment Property in Orange County

New to real estate investing? If you want to make certain to avoid the mistakes most newcomers make, design a budget to ensure your success as a real estate investor. Understanding which properties you can actually afford to purchase can be accomplished by taking the time to create a budget and sticking to it. Read on to discover how to create a realistic budget when buying investment property in Orange County.

Padding

Experts recommend adding 20 to 30 percent of the purchase price to the budget as a safety net, or padding in case of unexpected expenses. This practice helps to create a realistic budget when buying investment property in Orange County. Many investors begin without taking this precaution, eventually falling into a bottomless pit of what can be extremely expensive financial surprises. Because surprise repairs also mean delays, allowing for extra time in your plans will also be to your advantage, so you are not relying on an income stream that will not be flowing.

Repairs and Routine Maintenance

Bargain properties are often older fixer-uppers or suffering from a long-term lack of adequate maintenance. You will need to acquire a true estimate of what your costs will be to bring the property up to par and maintain that status, in order to create a realistic budget when buying investment property in Orange County. Unless your background is in the construction industry, include the costs of professionals in your expenses. Experienced investors know that this will save you money in the long run. When outlining the cost to purchase the property, include inspections, appraisals, and varying contractors that you may need to hire, depending on the results of the inspection. It would be wise to budget for regular professional inspections as well, in order to keep on top of new issues, avoiding possibly devastating damage and expensive repairs. 

Tenants

While it may be very clear that you must offer an attractive property and as many amenities as possible to retain your tenants, you must first find them. The further your reach with as much advertising as possible will mean reaching more desirable tenants. Along with the number of applicants you receive, will be the necessary credit and background checks to ensure you are working with solid tenants who will make pleasant neighbors. Verify the income claimed and call the references that are provided. Make certain your tenant application extracts the information you need to make the best selection. Your marketing plan and tenant screenings should be included to create a realistic budget when buying investment property in Orange County. 

Occupancy

By proper tenant screening, you will have a more reliable income stream, however, even the best of plans can go awry. Sadly, life can change the circumstances of your tenants and force a move, despite your best efforts. When a unit becomes empty, there will be cleaning and most often repairs that will need to be completed. Unless you’ll be doing all of the work yourself, set aside enough in the budget for cleaning and repair teams that act quickly because time is money. When you lay out your budget, remember that there will likely be a period of several weeks before realizing any income from the property. In a perfect world you would never have a vacancy, however, this just is not realistic in the world of property management. The vacancy rate, the opposite of occupancy rates, is the percentage of empty units over a given time period. It is always best to be prepared ahead by planning for the average vacancy rate in your area, thereby creating a realistic budget when buying investment property in Orange County.

System

Organization is the key to success. It is extremely important for the best outcome that you have a system in place to keep track of your expenditures and income generated by the property. No matter how much of a role you take in managing your own properties, keeping regular routines helps ensure the success of your investments. Be certain to keep open communication with any professionals in the industry as well as your tenant. Plan a management strategy that enhances building a good rapport creates a bond with tenants that increases retention. Taking the time to make the system a daily habit will help tremendously in maintaining a realistic budget when buying investment property.

Successful real estate investing is within reach! H&M Realty Group will help you create a realistic budget when buying investment property in Orange County. With careful planning, your real estate investment business will run smoothly, creating a sense of security for your tenants. We make it easy, it is all worth it when you work with H&M Realty Group. We make the time to listen to your goals and explain every step along the way. Let H&M Realty Group find the best deals for you. Send us a message or give us a call at 949-625-4533 today!

Joe

Broker/Realtor/Investor/Mentor (41 years experience) Specialties: Buyer's Agent, Listing Agent, Foreclosure, Short-Sale, Property Management, Landlord I'm a Full Time Real Estate Professional, house flipper and mentor to many of my clients. I am here to help you get top dollar for your home or get you the best price for a home that you are going to live in. I have over 40 years of real estate experience for you to draw on and actively list and sell over 20 homes a year. I have sold over 600+ homes in the last ten years alone. I am a very skillful negotiator and will work diligently to help you realize the best possible price when buying or selling your home. With my Exclusive Home Acquisition & Sales System, I can find the Right Home for You! I have access to homes no other Realtor will show you. I can show you how to save an average of $10,000.00 on the purchase price. We will find a home that fits your needs, in a neighborhood that suits your style. If you are selling your home then I can bring all the professionals to you. I always include professional photos in ALL my listings. I have contractors standing by to assist with those upgrades if needed. I can also quickly get you ALL CASH offers for your home if you desire. My marketing surpasses all other agents. It begins with extensive internet advertising to hundreds of websites throughout the world. I do direct mail marketing for you home and also knock on doors in your neighborhood when I am holding an open house. I hold you home open to expose it to as many buyers as possible. My Exclusive program is designed to sell your home for Top Dollar in Any market. I am an experienced flipper here in Orange County and therefore can offer you my over 40 years of real estate experience. The information is available to you at no charge! If you like what you see, please call me and setup Your Free Consultation.

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